Company

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 complex business structure, with higher set-up and administrative costs because of additional reporting requirements.

You need to register a company with the Australian Securities and Investments Commission (ASIC). Company officers and directors must comply with legal obligations under the Corporations Act 2001.

Key aspects of a company structure

  • Is a separate legal entity.
  • Has limited liability compared to other structures.
  • Is a more complex business structure to start and run.
  • Involves higher set up and running costs than other structures.
  • Requires you to understand 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.

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