Types of business structures and which is best for you
An important decision to make before you start a business is what structure your business will run under. This will reflect into all facets of your business, so you should spend time understanding the implications of each structure.
You have complete control of your business.
Your business assets and liabilities are not separate from your personal assets and liabilities.
Personally liable for debts and obligations of the business
Share control and management of business
Each partner pays tax on the share of net partnership income each receives
Minimal reporting requirements + Inexpensive to set up
Requires more documentation
Separate legal entity from its owners – all profit, tax, and legal liability is directly to the corporation
Members not liable for company’s debt (only liable if you breach legal obligations)
Complex business structure + Extensive documentation and record keeping
Wider access to capital
Expensive set-up and operation
Formal trust deed outlining operation required
Trustee responsible for yearly administrative tasks