A company is a type of business structure. You may consider a company structure when starting or growing your business. A company is a separate legal entity, unlike a sole trader or a partnership structure. This means the company has the same rights as a natural person and can incur debt, sue and be sued. The company’s owners (the shareholders) can limit their personal liability and are generally not liable for company debts.

A company is a littlebit complex business structure, with more set-up and administrative costs because of additional reporting requirements. Company needs to be registered  with the Australian Securities and Investments Commission (ASIC).  

 

Key aspects of a company structure

• Is a separate legal entity.

• Has limited liability compared to other structures.

• Is a littlebit complex business structure to start and run.

• Involves higher set up and running costs than other structures.

• Requires understanding and comply with all obligations under the Corporations Act 2001.

• Means that business operations are controlled by directors and owned by the shareholders.

• Must be registered for goods and services tax (GST) if the annual GST turnover is $75,000 or more. The registration threshold for non-profit organisations is $150,000.

• Means the money the business earns belongs to the company.

• Requires an annual company tax return to be lodged with the ATO.