When starting a new business, there are several options on how to structure the business.
Sole Trader - A sole trader is legally responsible for all aspects of the business including any debts and losses and day-to-day business decisions.
Company - A company is a type of business structure. When you set up a company, you create a legal entity that’s separate from you.
Partnership - A partnership is a business structure made up of 2 or more people who distribute income or losses between themselves.
Trust - A trust is a structure where a trustee carries out the business on behalf of the trust's members (or beneficiaries).
Co-operative - A co-operative is a member-owned business structure with at least five members.
Joint Venture - A joint venture is an agreement between 2 or more parties to work together for the purpose of completing a specific task or project.
There are many factors to consider in the structure you choose, some of these include:
- The nature of the business
- Family circumstances.
- Asset protection.
- Succession planning, when you sell a business.
- Tax planning.
- What tax registrations are required.
- How long you intend running the business
- Most appropriate accounting records system.
Each situation is different and there is no one size fits all solution.