Whenever someone is starting a new business, one of the most common questions that they will ask their commercial lawyer is what legal business structure they should use.
According to Commercial Lawyers Perth, the choice is extremely important as it has implications for many aspects of the business such as tax liabilities, the costs of running the business, and legal protection of the business’s assets.
In Australia, there are four main legal business structures that can be used, and they are sole trader, a partnership, a company, and a trust. Read on, and we will explain in more detail what each of them is, and the ease, or otherwise, of setting them up.
A sole trader is the simplest structure and they are extremely easy to set up. If you operate as a sole trader you are in full legal control of the business and whilst that has some advantages, there are also some not so advantageous aspects.
The main one is that you are liable as an individual for all the business’s debts and tax payments. If necessary, your own personal assets can be used to funds and pay these.