I'm a fashion designer and I want to start up my own business. Eventually I'd love to see my business grow and to operate as a company but that might be a bit optimistic as fashion is a difficult market. I'm not sure how long it will take my business to grow but it could be years and I don't want to have to deal with that level of complexity if I don't have to. Can I change my business structure down the track?
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Answer by LegalEagle™ staff, Melbourne 3000 VIC
- Changing from operating your business as a sole trader to a company can be a lot easier and more cost-effective than for example changing from a trust to a company.
- Given that you are unsure how long it will take your business to grow it might be advisable to operate as a sole trader initially. When you have a better idea about what the future holds for your business you can engage a lawyer to advise you on how to transition over to a company or other structure that better suits your future needs.
- It is far easier and more cost effective to change from a sole trader to a company than from a company back to a sole trader.
- Usually when changing business structures you will have to establish that you are not doing so for tax avoidance purposes. With a solid plan and with legal guidance this should be achievable for your business.