There are a number of structures that you can choose from when setting up your business. The four main types of business structures commonly used by small businesses are:
- Sole trader: an individual trading on their own
- Partnership: an association of people or entities running a business together, but not as a company
- Company: a legal entity separate from its shareholders.
- Trust: an entity that holds property or income for the benefit of others. Most commonly used trusts are Family Trust and Unit Trust
When deciding upon a structure for your business, it is critically important to choose the one that best suits your business needs in accordance with your business projections. The differences between the four main business structures can affect your businesses operation significantly. Businesses can also set up an ideal structure by combining different types of business structure to achieve stronger protection of your asset and flexible income flow distribution. Obtaining tailored professional advice can assist businesses to understand their own particular circumstances better.
