Choosing the right business structure
The way you structure your business should be tailored to your proposed operations and personal circumstances and provide you with the best protection possible.
When starting a business by yourself, operating as a sole trader may be preferred due to its simplicity, however, as a sole trader you will be liable for all losses and debts incurred in the course of running your business.
Starting a business with partners can be fraught with unforeseen issues which may not seem apparent at the beginning of the venture. A formal partnership agreement should be drafted to put partners on the ‘same page’ at the start of their relationship and to provide for contingencies and unforeseen problems. A downside commonly cited in relation to partnerships is that all partners bear the liability for all debts and losses incurred by the partnership no matter which partner is responsible.
You can create a company by registering it with the Australian Securities and Investment Commission (ASIC). As it is a separate legal entity, a company structure can help you to avoid or minimise some of the pitfalls of personal liability which may otherwise arise in a partnership and sole-trader structures.
We can help you make informed choices when setting up your business structure whether by partnership, joint venture, company, trust, or franchise. If you are looking to restructure your business, we can also assist with partnership dissolutions and corporate restructures.