Having a business idea is great but what next? To turn your business idea into reality you must have a concrete plan that could help you take realistic steps towards your business setup. It is better to be prepared when you are planning to set up your own business or things might not move as expected.
Many entrepreneurs have sound business ideas but they are unable to
figure out what all it takes for the business setup. Amongst the various tasks
that you need to consider while setting up your business, the most difficult
task that you would need to do is decide the type of structure for your
business. While there are different structures that you can choose for your
business, every structure has its own pros and cons. If you are not sure which
business structure might be right for you, don’t worry as this article will
help you out with each such structure. Not only business structures, but you
will also get to know everything you need to know about business setup in Australia.
Which are the options when it comes to business structure?
When setting up a new business, you would need to decide the structure
you want for your business. This is a very important decision that you are
going to make for your business since it will have a lot of implications for
your business. The type of business structure that you can choose from include
sole trader, company, partnership, or trust. Here is a brief about each of such
structures. Let’s dig into the details!
Sole Trader: As the name already describes this business lets you control your
business individually. You invest in your business and enjoy the returns. If
your business is less complex and you want the simplest business structure you
should set it up as a sole trader.
Company: Company has a separate legal existence. The ownership of members in a
company is determined by the proportionate holding held by them and they have
limited liability. You might find this structure a bit complex because a lot of
formalities are involved but this structure is opted by many businesses due to
its legal acceptance globally.
Partnership: If you want to work in a partnership all you need to do is to enter
into a partnership agreement with the persons who you want as partners. Based
on the profit-sharing ratio that you agree with your partners, the profits and
losses would get divided. This business structure would be suitable for you if
you along with your prospective partners have some common objectives.
Trust: This business structure comes with associated tax benefits on income
splitting. The trustee of the trust is held accountable for the activities of
the trust.
Yes, the business structure is the most important decision that you
would make when setting up your new business. But there are a couple of things
more that you would need to take care of. To start with you would need to
decide some unique name for your business so that your business gets its unique
identity. Once your thoughts are final on the business name you can get it
registered so that you have the sole right over such name. Believe it or not,
getting a business name registered is very important. Your business websites,
logos, advertisements, and other designs all are going to include the business
name after all. Talking about websites, how can we forget domain names! We
suggest that you get access to your domain name so that customers can reach out
to you and your business finds recognition. For that to happen, you must choose
a domain name that depicts your business in the best possible manner.
A new business setup would definitely require some initial business
registrations such as ABN, GST, PAYG, and so on. Check what all tax and
business registrations apply for your specific business and get these done at earlier. It is better to stay compliant to avoid any penalties. Just after
you set up these initial things you should also consider taking other important
decisions such as business financing, software to be used, recruitments, vendor
selection, and much more. The early you start acting, the more will your business
succeed.
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