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If you’re starting a business in Australia, you’ll need to carefully consider which structure is right for you. Each structure has advantages and disadvantages, and it’s important that you understand your obligations under each. Here are five business structures that are suitable in Australia.
1. Companies
A company is the most common structure in Australia. They are separate legal entities where liabilities stay with the subsidiary, unless the parent company gives guarantees or subsidiary trades while insolvent. Companies are registered with the Australian Securities and Investments Commission and will have an assigned Australian Company Number. In most cases, they are required to lodge annual financial reports with ASIC.
2. Branches
A branch is not a separate legal entity. A foreign company must be registered with the Australian Securities and Investments Commission and will be assigned an Australian Registered Body Number. Branches are also required to lodge annual financial reports with ASIC.
3. Trusts
A trust is an obligation that allows a third party to hold property or income. Trustees are obliged to hold property or assets, like business assets, for the benefit of beneficiaries. Trusts can often be expensive to set up and operate.
4. Partnerships
These are a group of individuals or companies that share a common business objective. The partnership is governed by an agreement that outlines the rights and obligations of the partners. Partnerships are relatively easy and inexpensive to set up, but it’s important you understand the Partnership Act of your relevant Australian state or territory.
5. Joint Ventures
A joint venture is an unincorporated contractual association that is shared between two or more people. They have a specific business project and their relationship is governed by an agreement that is specific to the venture.
Your business structure is essential to your success in Australia. If you’d like more information on how to set up your business in Australia, get in touch with us at Altus Financial today.
