One of the most common questions that we get asked is “What is the right tax structure for my new business?“. While it might seem like a very simple question, getting the right business structure is vital since this will be the foundation for the tax planning that can be done during the lifetime of the business venture. We will sit down with you, talk to you about your goals, needs, and operations to find out the right business structure for your situation.
If you operate as a sole trader, you are running and managing your own business. You are solely responsible for all decision-making aspects of your business. Profit, losses, and debts are not shared with others.
Your business is owned by a number of individuals and you usually have shared control of the business with your partners. Like the Sole trader, you are also liable for the debts of the business and you pay tax depending on the share of the net partnership income you earned for a specific period.
A nominated trustee usually carries out all the obligations of the trust. While this may be a complex structure to set up and operate, liability is limited, and there is flexibility in the distribution of the income. You don’t have to pay tax for the Trust. Taxes are assessed on the income received by the beneficiaries of the Trust.
You are a separate legal entity when you set up a company. Unlike Sole trader and Partnership, you have limited liability as the company acts as a natural person, who can incur liability, debt, and maybe sued. The company also pays a fixed rate on tax based on the profits earned by the company.
So whether you are a Sole Trader, Partnership, Company or Trust, we will ensure the process is as simple as possible and you understand the benefits, drawbacks, responsibilities, legal compliance, the differences, and reporting procedures required for each business structure. We will assist and guide you in achieving your objectives and goals as a business start-up and find you the best suitable accounting system and solution for your business needs.