Business Structure Lawyers Penrith Area

There are several forms of business structures, each having its own legal and accounting requirements. The form of organisation of a business determines many things, including how tax is paid and how profits are disbursed, and it should be geared to help you achieve maximum benefits.

The types of possible structures include:

Sole Trader:

With this structure you intend to conduct your business on your own or with employees but with no joint owner. As a sole trader you are responsible for all debts and may have to mortgage your personal assets when borrowing for your business.

Partnership:

Up to twenty people may form a business partnership. A larger number is possible for some professions, such as accountants. If no formal partnership agreement exists, partners are deemed by law to be equal owners and the relationship between the partners shall be governed by the Partnership Act. Liability for all debts may fall on any of the partners jointly and severally-if one absconds or dies the others are left with the liabilities.

Limited liability Company:

If you form a company, you will as a shareholder have limited liability, you may become an employee and also a director but with certain liabilities and strict responsibilities set out in the Corporations Law and subject to tax, record keeping, and reporting obligations.

Trusts:

These may be more appropriate for holding business assets, rather than trading. Trusts usually take the form of either discretionary trusts or unit trusts and will involve the appointment of a trustee to control and operate the trust. The trustee is usually a limited liability company.

The major considerations for the choice of the most appropriate structure for a particular business include:

• the simplicity and cost of creating the structure;
• the nature and size of the business;
• the taxation consequences of the structure chosen;
• the liability to third parties consequences of the structure chosen
• the nature and extent of control and management required for the business;
• the cost and complexity of terminating the business and the structure chosen.