How to Register a Business
Registering a business can be complex and is often the first hurdle in setting up your business. There are a few easy steps to follow when registering a business to ensure that you are set up correctly. These include:
- Understanding your business goals – Business Plan
- Choosing the right business structure to register
- Registering your business
1. Understanding your Business Goals
Before jumping in and registering your business, careful consideration should be given to understanding your business goals and objectives as these will help drive the right business structure to follow. For example, a business that trades overseas will have a very different risk and tax profile than a coffee shop trading in your local area. Creating a business plan is the best way to fully develop and express your business goals and ideas. A business plan will assist you in selecting the right business structure.
2. Choosing the right business structure to register
Choosing the right business structure to register is critical to the success of your business. There are a range of risk and tax implications to be aware of before registering your business. It is strongly recommended that you seek advice before choosing a business structure to register, as each business will be fundamentally different in its operations.
The most common types of business structures have been listed below:
|Business Type||Ownership||Risk||Tax Rate||Tax Minimization Strategies|
|Sole Trader||Controlled by Owner||Higher Risk – Personally liable for business decisions||Your marginal tax rate||Fewer tax minimization strategies available|
|Partnership||Controlled by the partners in accordance with partnership agreement||Moderate Risk – Partners are liable for business decisions||Individual Partners marginal tax rates||Some tax minimization strategies available|
|Trusts||Trusts are held for the benefit of the Beneficiaries. The Trust is not owned by one individual, but the Trustee is responsible for decisions made on Trust assets||Lower Risk – Assets are held in Trust, therefore it is difficult for third party to have any rights over assets, however a Trustee is legally responsible for decisions made in their capacity as Trustee.||A trust can distribute income according to the trust deed. This is included in each beneficiaries individual tax return.||Significant tax minimization strategies available.|
|Company||Controlled by the Directors and owned by Shareholders||Lower Risk – Only company assets are available in litigation claims.||Company tax rate||Moderate tax minimization strategies available.|
3. Registering your business
After you have selected your business structure its time to register your business. There are several ways you can register your business, including:
- Register your business through ASIC and the ATO directly
- Register your business through an Accountant
- Register your business through a third party provider
Generally speaking, unless you really understand the different types of business structures and applicable types of tax registrations it would be advisable to see an accountant or another third party provider that can guide you through the process.