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Should I set up a company for my business?
If you have a business (or you want to set one up), setting up a company is a potential business structure to consider.
Other options are going it alone as a sole trader, going into partnership with one or more people, or setting up a trust. Each business structure has its pros and cons.
The pros of setting up a company
The major advantages of setting up a company include:
you not being personally liable for your company’s debts if you set up a company and you structure it appropriately, and
potentially paying less tax.
The company tax rate in Australia is 27.5% for businesses with an annual turnover of less than $25 million. This rate is lower than most marginal tax rates that you would otherwise pay if you earn more than #37,000 in business income and you use a sole trader, partnership or trust structure.
The cons of setting up a company
The major disadvantages of setting up a company include:
high setup costs,
high ongoing reporting and compliance costs, and
potentially having less control over your business than you would with other types of business structures.
Obviously, the pros of setting up a company need to outweigh the cons for this business structure to be worthwhile. You should seek professional advice if you’re thinking about setting up a company.
About us
At Scorpion Bookkeeping, we can help you with any bookkeeping support services that you may need, no matter what type of business structure you have. We currently have clients in a diverse range of industries in South Australia, Victoria and New South Wales.
We can also help you to implement Xero bookkeeping software to help you. We are a Xero-certified partner.
Contact us today to find out how we can help your business!