{"id":246,"date":"2018-01-01T06:07:06","date_gmt":"2018-01-01T06:07:06","guid":{"rendered":"http:\/\/teamworkaccounting.com.au\/?p=246"},"modified":"2018-09-03T02:14:25","modified_gmt":"2018-09-03T02:14:25","slug":"business-structure-use","status":"publish","type":"post","link":"https:\/\/teamworkaccounting.com.au\/business-structure-use\/","title":{"rendered":"What business structure should you use?"},"content":{"rendered":"<h2>Learn about the four main types of business structure in Australia<\/h2>\n<p>For every business you own, there is a structure that comes with it. Deciding on a <a href=\"http:\/\/teamworkaccounting.com.au\/services\/business-accounting-2\/\">business structure<\/a> isn\u2019t a quick decision, as each one has its own advantages and disadvantages. To help you figure it out, we\u2019ve outlined four of the main business structures below:<\/p>\n<h3>Sole Trader<\/h3>\n<p>Many people start out as a sole trader. It\u2019s the simplest and easiest structure to set up. All you need is a valid ABN and you can begin. Your tax return happens at the end of the financial year as normal and if you reach the threshold for GST, you register and charge GST. But the biggest downside of this structure is that if you run into financial trouble, everything you own is at risk.<\/p>\n<h3>Partnership<\/h3>\n<p>Partnerships are two or more people who run a business together and share profits. Like sole traders, each person in the partnership is liable when it comes to debt. To protect yourself and everyone involved from future issues, it\u2019s best to draw up a partnership agreement that outlines everything, including who is responsible for what, how profits will be shared and distributed, and what happens if one of your partners wishes to exit the partnership.<\/p>\n<h3>Company<\/h3>\n<p>Unlike partnerships and sole traders, a company is a separate legal entity, which means your personal assets are safer in case the business runs into hard times. All shareholders in the business receive after-tax profits via franked dividends, and any salaried shareholder must receive the mandatory superannuation contribution. Though this structure may look like the best way to protect yourself from financial trouble, setting up a company structure is a costly exercise to set up, and 100% of any capital gain is taxed.<\/p>\n<h3>Trusts<\/h3>\n<p>There are many different types of trust structures, but the most common two are:<\/p>\n<ul>\n<li>discretionary trusts, most commonly used for a family business,<\/li>\n<li>unit trusts, where there is more than one \u201cpartner\u201d in the business and each partner has a fixed entitlement to the profits of the unit trust.<\/li>\n<\/ul>\n<p>Trusts are a complicated structure that offers many tax benefits but can also incur losses that affect future profits. The ATO provides a step-by-step guide to setting up a trust, but it is best to get legal advice and assistance to ensure you meet all the requirements and find an accountant who understands management of a trust.<\/p>\n<h3>Which one\u2019s for you?<\/h3>\n<p>Now you\u2019ve got a good overview of what business structures are out there, it\u2019s time to make a decision. Knowing the right one means your business could save you in tax or protect your personal assets. But you shouldn\u2019t make this decision alone. Talk to your accountant or a business lawyer to make sure you have the best structure for your needs.<\/p>\n<p>At <a href=\"http:\/\/teamworkaccounting.com.au\/contact\/\">Teamwork Accounting<\/a>, we are specialists in setting up business structures that are right for your needs. Call today on 1300 TEAM4U (1300 832 648).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Learn about the four main types of business structure in Australia For every business you own, there is a structure that comes with it. Deciding on a business structure isn\u2019t a quick decision, as each one has its own advantages and disadvantages. To help you figure it out, we\u2019ve outlined four of the main business &#8230; <a title=\"What business structure should you use?\" class=\"read-more\" href=\"https:\/\/teamworkaccounting.com.au\/business-structure-use\/\" aria-label=\"More on What business structure should you use?\">Continue Reading<\/a><\/p>\n","protected":false},"author":6,"featured_media":326,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[8],"tags":[9,13,10,12,11,14],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Business Structures: Which One Should You Use?<\/title>\n<meta name=\"description\" content=\"Choosing the right structure for your business can mean the difference between growth and stagnation. 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