Outgrown Your Business Structure? We can help!

What is a company and what is required to operate a company (Pty Ltd)?

• A company is a separate legal entity that requires a director/s and shareholder/s.
• As a company director, you can limit your personal liability for company debts.
• A tax effective business structure which is taxed at 27.5% on your business profits whether you make $1 or $1 million of net profit (as long as your company has a turnover of less than $25 Million).
• Initial set-up and ongoing administrative costs of operating a company.
• Companies are subject to an annual review by the Australian Securities Investment Commission (ASIC); sole traders aren’t.
• Companies must maintain financial records (Special Purpose Financial Reports) that comply with the Corporations Act 2001. Companies must lodge a Company tax return.
• Sole traders only lodge an individual tax return.

Why change to a company structure?

You might consider changing to a company structure to:

• Limit your personal liability.
• Lower your tax liability by accessing company tax rates, as opposed to individual tax rates depending on the level of profit in your business.
• Position your business for growth, or to attract investors.
• Access greater legal protection between yourself and third parties, such as employees or suppliers.

How to change to a company structure?

Changing from a sole trader to a company isn’t for everyone. You will need to seek professional advice so you are able to weigh up the pros and cons to make an informed decision as to whether a company structure is right for you and your business.

If you’ve decided that a company structure is the right move for your small business or you would like to discuss your business structure, feel free to contact our office for a complimentary, no obligation discussion.