AdvisorCorp is registered with the Tax Practitioners Board
We are also a member of a professional accounting organisation Institute of Public Accountants. We abide by professional and ethical standards.
AdvisorCorp is registered with ASIC
As an registered agents we make lodgements to ASIC registers on behalf of our our client companies.
Need help with Business Registration?
Our Advisors can help you understand your own particular circumstances.
Four main structures
The owner is a sole proprietor who controls and manages the business. This structure is appropriate where the business is small, and the capital investment is minimal.
- Inexpensive and straightforward to set up with minimal record-keeping requirements for legal and tax purposes
- The owner retains all the profits and is responsible for all debts and liabilities
- The owner has unlimited legal liability for all expenses and debts, which means that personal assets can be used to pay business debts
- A sole trader pays tax as part of their income tax return at their marginal income tax rate – as the business earnings increase so does the owner’s tax rate
- The business can easily cease or be sold.
A partnership consists of two or more people (up to 20) who hold joint ownership of a business. Partnerships are an efficient way of combining expertise, knowledge, resources and additional finances to run a successful business.
- Partnerships are easy and relatively inexpensive to establish – a written partnership agreement is not mandatory but is strongly recommended
- Profits of the business are distributed to the partners who then pay income tax at their marginal tax rate according to their personal circumstances
- Partners don’t have to hold equal shares in the business; however, each partner is jointly and individually liable for all financial obligations of the business and there is unlimited legal liability for all partners
- Disputes between partners occasionally arise which may hinder the operation of the business
- Transfer of ownership from one partner to another person can be complex. If a partner leaves, retires or dies, the partnership usually has to be dissolved.
A proprietary limited company is a separate legal entity with its income tax liability. It is incorporated under the Corporations Law and is regulated by the Australian Securities & Investments Commission (ASIC).
A proprietary limited company must have at least one director and one shareholder (who can be the same person) and can have up to 50 non-employee shareholders.
Key aspects of a company structure
- Is a separate legal entity.
- Has limited liability compared to other structures.
- Is a more complex business structure to start and run.
- Involves higher set up and running costs than other structures.
- Requires you to understand and comply with all obligations under the Corporations Act 2001.
- Means that business operations are controlled by directors and owned by the shareholders.
- Must be registered for goods and services tax (GST) if the annual GST turnover is $75,000 or more. The registration threshold for non-profit organisations is $150,000.
- Means the money the business earns belongs to the company.
- Requires an annual company tax return to be lodged with the ATO.
A trust is an arrangement where one party, the trustee (either a person or a company), carries on business and holds assets for the benefit of the other parties, the beneficiaries. The most common form of trust is a discretionary trust, also known as a family trust. All income of the business goes into the trust, and the trustee has the power to decide how to distribute the income to the beneficiaries. The rules by which the trust is managed are contained in a trust deed.
- A trust is a complex structure which has to comply with specific regulations, so establishing a trust needs to be done by a solicitor or accountant – this can be expensive
- Ownership of the business by a corporate trustee provides asset protection and limits liability in relation to the business
- Beneficiaries of a trust pay tax on income they receive from a trust at their marginal rates. Therefore, income distributed to children under 18 may be taxed at higher rates than adults
- Beneficiaries of trust are generally not liable for the debts of the trust – assets of the trust may be controlled by the beneficiaries, but they do not own them.