As a business owner, choosing the right structure for your business is a crucial decision that can impact your tax and liability obligations. With various business structures available, it can be overwhelming to determine which one suits your needs best .At Monger Baker Chartered Accountant, based in Mortdale, we specialise in tax, business accountancy, and superannuation, and can provide expert advice on selecting the best structure for your business.
Structures
There are four primary business structures in Australia – sole trader, partnership, company, and trust. Each structure has its own advantages and disadvantages in terms of taxation, liability, and management. Before making a decision, it’s essential to understand the features of each structure and how they align with your business goals.
Taxation
Taxation is a significant factor when considering a business structure. A sole trader, for instance, pays income tax on their business’s profits at their individual income tax rate. In contrast, a company pays income tax at rates of 25-30%. A partnership’s income is divided among the partners and taxed at their individual income tax rate. A trust’s beneficiaries pay tax on the income distributed to them. By understanding how each structure is taxed, you can make an informed decision that minimises your tax obligations.
Liability
Liability is another significant factor to consider. As a sole trader, you’re personally responsible for all the business’s debts and liabilities. In a partnership, each partner is personally liable for the debts and liabilities of the business. A company and a trust, however, offer limited liability, which means the business’s debts and liabilities are separate from the personal assets of the shareholders and beneficiaries. If your business is high-risk or has significant liabilities, a company or trust structure may be the most appropriate.
Management
Management is the third factor to consider when choosing a business structure. A sole trader has complete control over the business’s decisions and management. In contrast, a partnership structure requires shared decision-making among the partners. A company has a separate legal identity from its shareholders, and a board of directors manages its operations. A trust, on the other hand, has a trustee who manages the trust’s assets for the benefit of its beneficiaries. By understanding how each structure is managed, you can determine which one aligns best with your business’s goals and operations.
Our services
At Monger Baker Chartered Accountant, we understand that choosing the right business structure can be a daunting task. Our team of experts can provide personalised advice to help you select the most suitable structure based on your needs and goals. We offer small business advice, accounting and bookkeeping, BAS, and tax services to ensure your financial records are accurate and up-to-date. We can help you manage your tax obligations and optimise your tax returns.
Contact us
In conclusion, selecting the right business structure is critical for your business’s success. By understanding the taxation, liability, and management features of each structure, you can make an informed decision that aligns with your goals. Monger Baker Chartered Accountant can provide expert advice and support to help you navigate this complex process. Contact us today at 02 9580 2522 or visit our website here. Our office is located at Suite 1, 47–51 Morts Road, Mortdale.
Our Chartered Accountants at Monger Baker have a reputation for providing exceptional accounting services and approaching our business in a personal and proactive manner. If you need help reaching your financial goals, contact us to set up a meeting with a member of our specialist team.
A straightforward and dependable accounting service
Monger Baker's mission is to establish strong, mutually beneficial relationships with our clients and professional partners. Our quick, simple and dynamic methods add tremendous value to you and your business. Simply put, you need an accounting solution that is simple and produces accurate financial statements. You want a service that is dependable and will not leave you in the dark. Monger Baker provides all of this and more!
Our Chartered Accountants at Monger Baker have a reputation for providing exceptional accounting services and approaching our business in a personal and proactive manner. If you need help reaching your financial goals, contact us to set up a meeting with a member of our specialist team.