Business Structures Perth

Different business structures are more appropriate for some businesses than others. That’s why it’s important to lay the right foundations from the beginning and create a business structure that best suits your company’s position and goals. In general, there are four main types of business structures. 

1. Sole Trader 

A sole trader is legally responsible for all aspects of the business, including any debts, losses, and day-to-day business decisions. This is the simplest form and most inexpensive business structure, as sole traders are legally liable for running the business. 

2. Partnerships

Partnerships refer to when two or more individuals are partners in a business, distributing the income or losses between themselves. Relatively straightforward to structure, most partnerships establish an agreement that covers responsibilities and possible structure ends or changes in the future. 

3. Proprietary Limited Company

A proprietary limited (Pty Ltd) company is a business structure that is a separate legal entity from the business, meaning that the business is not liable for the company’s debts. A business with a Pty Ltd company business structure receives company profits in the form of dividends. 

4. Trust

A trust is a business structure used to protect company assets for the benefit of other trust members (beneficiaries), providing more flexibility in income distribution.

Business structuring will influence how a company operates, from the day-to-day tasks to taxes and liabilities of individuals. Implementing the right business structure can make the difference between a comfortably flowing organisation and a business fraught with hurdles, pain-points, and internal issues.

MKM Accountants & Advisors work with Perth businesses to set up well-aligned and thought-out business formations that take into consideration the business’s product or service offering, the business’s goals, and the current positioning. Business structuring Perth services will consider any licensing the company requires, the number of shareholders and employees, taxes currently paid, and potential personal liability.