Asking the right questions at the beginning of your business journey is important as it shapes the path you’ll be taking. You should be building out your business plan to reflect how you want your business to look in the next 5-10 years, and then building the structure to support that.
We BLinks 360 can provide advice on the best business plan and structure for your business, both where you are now and how you plan to grow.
Sole Trader
This is a low-cost option for starting your business. It’s controlled by you as an individual, and you as an individual are responsible for the income, expenses and debts of the business. It is ideal for those who provide contract services.
Partnership
A partnership is controlled by two or more people, who share profits based on set percentages. This type of model is a low-cost option for a start-up business. Every year a separate tax return will need to be completed.
Company
A company is a separate legal entity, controlled by shareholders and operated through managers, directors or agents. Tax is paid on profits, based on company tax rates.
Discretionary Trust
A discretionary trust offers a lot of flexibility in a family-owned business. In this type of trust, trustees retain a discretion in allocating trust income or capital to the trust beneficiaries. A discretionary family trust provides a trustee with flexibility to allocate income in a tax-effective manner.
Fixed Trust
A fixed trust differs from a discretionary trust in that a beneficiary’s interest under this type of trust are fixed. That is to say, trust income and capital must be allocated by a trustee in accordance with the beneficiaries’ fixed entitlements.
Self-Managed Superannuation Funds (SMSF)
SMSFs are designed to give owners of these funds control over the investments that will fund retirement. Superannuation is a low taxation option for investments if managed appropriately.
