Company Structure

Company may be the most well-known business structure. However, what is it mean by running a business under a company structure?

First, Your company is a separate legal entity from you as a director or
shareholder.

Therefore, if someone takes legal action against your company doesn’t mean it is against you.

Second, The money the business earns and its assets do not belong to you, they belong to the company.

Third, If you take money out of business or use its funds or assets for yourself or your family, it needs to be reported
and you must keep appropriate records.

How can I use my company’s money or assets for myself?

You might take money out of the company or use its assets for
private purposes through:

– salary, wages or directors fees
– repayments of a loan you have previously made to the company
– a fringe benefit, such as an employee using a company car
– dividends (a formal distribution of the profits)
– a loan from the company.

There are different reporting and record-keeping requirements for
each of these circumstances.

What business structure suits me? Company structure?

It is no easy answers. Everyone will think about a company structure to run a business. The downside of a company is it pays a fixed tax rate, 30% (27.5% for Turnover less than 50M). It also has a complicated Franking system every time you pay a dividend to shareholders.

Trusts are relatively flexible system; however, it is not easy for the general public to understand. It also comes with a higher setup cost.

To understand what business structure suits your situation give us a call on 02 8011 4699 for your first free appointment today.