On average 20,000 new companies are registered in Australia each month. Should you start a company too? Before you join them, here’s what you need to know.
What is a company?
What do you mean by company? A c company is a legal entity formed by a group of individuals to engage in and operate a business for profit. A company has a seperate legal identity to its owners, which is its chief advantage. If a business goes bust, it is your company that goes broke – not you.
Is a company structure right fit for you?
Asset protection is the primary reason companies are formed. Start a company and give it some capital. Whatever capital the company starts with is the maximum you can lose. There are many pro’s and con’s but asset protection is key. It is the main reason companies are created.
When should I start a company?
Changing to a company structure when your business is already up and running is inconvenient. The business is already trading as partership or sole trader and then customers need to be informed that the entity has changed, along with its bank details. A company is a seperate legal identity, so new bank accounts, tax file numbers and ABN’s will need to be obtained for the company. The old ones are then phased out. You can avoid this time consuming hassle by starting your company when you start your business. The best time to start a company is when you start your business.