When starting your own business it is important to operate through a structure that meets your particular commercial needs both now and into the future.

For many people who want to start a business a company seems like the obvious and popular choice. There are many benefits from operating through a company including

• a flat tax rate of 30%;
• the commercial familiarity of the company structure;
• the potential to limit personal liability for debts incurred by the company; and
• ease of transfer of ownership.

However depending on the type and scale of business you intend to operate there can be significant disadvantages and unnecessary complexity associated with a company structure. The ongoing financial reporting, fees and regulation for companies is much more stringent (strict) than it is for sole traders, partnerships and some trusts. Companies can be more expensive to set up and maintain. There are also heavy responsibilities placed on directors and other office holders.

Understanding the effect of these considerations on your particular business will assist you in deciding whether a company is right for you.

This Legal Guide on Companies provides small to medium business owners with information about setting up a company. Before making important decisions it is advisable to obtain legal advice specific to your situation. LegalEagle’s™ free directory profiles all lawyers in Australia. You can use it to Find a Lawyer near you who specialises in company law.

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Warning: Information provided through LegalEagle™ is for general guidance. It is not legal advice. Laws and procedures referred to may change and differ between states, territories and nationally. There may also be important exceptions or qualifications. Only a lawyer providing formal legal advice can assess your particular circumstances to determine how the law will apply.