Knowing When to Change Your Business Structure
Regardless of whether you are a new or existing business, it is important to think about your business structure. As a business grows it undergoes significant changes that can alter your tax requirements, as well as create a need for a change in business structure. The differences between the four main business’ structures can really affect your business present and future. Therefore it is important to seek advice on the best structure for your business in accordance with your future business projections.
The four business structures are:
The simplest business structure and consists of an individual trading on their own; this person controls and manages the business.
Consists of two or more people, each person is entitled to take part in the management of the partnership. Partners can have joint ownership of assets, joint liability for debts, and can share income jointly.
A separate legal entity capable of holding assets in its own name. The two main participants in a company are the shareholders and the directors. Private, or proprietary, companies have no more than 50 non-employee shareholders and cannot issue a prospectus or sell shares to the general public.
An obligation imposed on a person to hold property or income for the benefit of others (who are known as beneficiaries).
Your business structure is often the first thing to change when your business grows, particularly if you start as a sole trader and then want to take on a partner or even register as a company. Choosing the right business structure is an important decision, so you need to investigate each option carefully to decide which best suits your needs. If you have made significant changes to your business, remember to also update your advertising materials, such as business cards, signage and logos.
If you would like more information on how to best structure your business, or on restructuring your business, please contact the experienced team of business lawyers and business accountants here at The Quinn Group. Visit our website to submit an online enquiry or call us on 1300 QUINNS (784 667) to book an appointment.