When you go into business, you have the option of either being a sole trader or entering into a business partnership. There is also the option of starting up a company, and in this post, we’ll look at a couple of key advantages as to why setup a company might be the best idea.
What Exactly Is Setup a Company?
When you start a company, it’s a legal entity all on its own, separate from the individuals running the company. With a business, you are the business. With a company, the company is the business.
Companies can also own property, and companies can also be sued, just like a person.
Public companies are listed on the stock exchange and are made up of individual public shareholders. Private companies don’t distribute shares to the general public and cannot raise funds through share offerings.
Smaller businesses tend to operate as private companies.
So Why Establish a Company?
There are many reasons why you might decide to go the company route over being a sole trader or partnership. Let’s look at some of the top reasons and advantages.
Payless Tax – This is one of the most attractive qualities a company has to offer. Who doesn’t get excited over the prospect of paying less tax? Overall the tax rate will work out lower than if you were running a regular business. The company tax rate is set at 30% on profits, so when you receive dividends, you will often receive tax credits.
Limited Liability – Also a huge advantage when running a company. In a nutshell, this means that individual shareholders are not liable for the companies debts in most instances, and therefore cannot have their personal assets seized in order to cover those debts.
More Control – Those who own the business are the shareholders in the company, whereas those you appoint as the managers and directors of the business are separate from the company’s shareholders, and therefore don’t own a part of the company.
Company Jurisdiction – Once your company has been registered in one Australian state, provided your company number appears on all paperwork, you are free to conduct business all across the nation.
Need Help Starting a Company?
Have a chat with your local legal representative who fully understands the advantages of setting up a company and the processes involved. In Brisbane, your team of experienced professionals is Aylward Game Solicitors.
Article Source: Why You Should Setup a Company
