Australia is a very attractive location for any entrepreneur to establish a business. It is ranked 18th in the world on the ease of doing business index and provides a very open market for a company to thrive. Australia is one of the hubs for innovation and business in
Common types of Business Structures
- Sole Trader: the simplest structure for any business in Australia allows you to set up a business with complete control over assets and business decisions. It is the lowest cost structure and has very few regulatory requirements once established. An individual’s tax file number – TFN can be used to file all taxes.
- Partnership: There are broadly three types of partnership firms namely:
- General Partnership: All partners are equally responsible for the business including all liabilities that the business might take on.
- Limited Partnership: Liability is typically limited to the amount of individual capital contributed by the partners.
- Incorporated Limited Partnership: Like a limited partnership can be created to limit personal liability however it requires at least one partner to be a general partner who must take on the unlimited liability of the company.
Partnerships are relatively easy and inexpensive to set up and like a sole trader have minimal reporting requirements set by the regulatory in Australia. Compliance requires a special tax code for businesses called the ABN – Australian Business Number for all taxation purposes. GST is charged if the company’s taxable turnover is above 75,000 AUD.
- Company: probably the most common type of business structure involves creating a complete separate legal entity unlike the above two options. This simple distinction allows a company to incur debt for operating within Australia. There is barely any personal liability when we speak of companies. Setting up a company is typically more complicated and incurs some cost depending on the size and type of business. The corporations Act of 2001 is the regulatory mandate all companies in Australia need to comply with.
Choosing your Location:
Careful consideration should be given to the choice of location. There are several factors that can influence this decision and it’s in the entrepreneur’s best interest to conduct through research before committing to a location. Ensuring quick and easy access to suppliers, raw materials and an accessible market can be crucial in determining the ease of doing day to day operations of the business.
It is generally advantageous to establish a business with the right surrounding. Entrepreneurs should typically study the area and businesses around the potential location to help compliment their own. Property prices to buy/lease land is one of the keys determining factors and can greatly impact choice. For example, a business hub or coworking space may prove instrumental in saving operating costs and ensuring the right access to infrastructure.
Meeting Legal Requirements:
Conducting business in Australia require strict adherence to the rules and regulations set by the companies act. Registering a business and filing for a business name are typically the first steps one takes. Registration of an Australian Business Number – ABN and setting up a PAYG (pay as you go) system to withhold tax from your employees are mandatory. This is a quick process and can be completed within a mere few days.
There might be other licensing requirements depending on the nature of the business, for example construction permits for manufacturing and real estate firms.
Incorporating a company in Australia can pose a challenge with the different regulations under the company's act. However, the ease of doing business and the healthy economic indicators can prove highly lucrative for your budding business. The strict deadlines and paperwork can draw away your precious focus from things that truly matter. Our team at HBF boast a capable team of professionals to help free your valuable time and effectively facilitate the establishment and compliance of your company. Setting up your business in Australia has never been this hassle-free.