Taking that leap of faith and starting a business involves a lot of excitement. But it also involves quite a few decisions – big and small.
One of the first tasks when crafting your biz from the ground up is that ever-so-important aspect of business structures.
That’s why over the next few months, I’ll be diving into each of the 4 business structures to select from when setting up your business.
Today we’re kicking things off and chatting about one of the most common forms of business structures – the sole trader.
The sole trader structure is a fantastic option for small-scale businesses near and far. Those who choose this structure have the option to trade under their name (e.g Megan Black) or register a business name (e.g. IM Business Solutions).
So, let’s see if the sole trader structure is right for your biz…
• Common for businesses starting out
• Structure is simple and cost-effective
• Only need an Australian Business Number (ABN) to get started
• Can use your individual tax file number to lodge tax returns
• Ability to take cash out of the business as drawings without tax consequences
• Required to pay tax based on profit from the year
• Fully responsible for any liabilities of your business (unlimited liability)
• This can extend to personal assets to pay any business debts
If you’re going to take one thing away from this blog, we recommended contacting an accountant or seeking legal advice before deciding on your business structure.
Want to learn more about the sole trader business structure? Contact IM Business Solutions in Perth today.