Starting A Business In Australia – 5 Things You Should Know

Starting a successful business requires pre-planning. There are many factors investors must consider when establishing a business in Australia.

Research

Before starting a business, it is necessary to become acquainted with the Australian market. This means you need to know who your customers are, the nature of your industry and also who your competitors are. This will help to create a framework around which you can build your business.Business structure

There are four types of business structures in Australia and you can choose any of these when establishing your business. These include sole trader, partnership, trust and company. The selection can be made based on which structure best suits your business requirements. The structure of the business will determine the licenses that are needed and will also influence the taxation and legal requirements.

Sole trader: This is the most widely used and simplest type of business structure. The owner retains complete control of the business and there is no division between business and personal assets. As a sole trader, you are required to pay income tax at personal tax rates.

Partnership: A partnership involves two or more individuals entering into a business together for the purpose of making profit. The partners are in ownership of all business assets and are responsible for all liabilities. It is advisable to seek professional help when drawing up a partnership agreement.

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Company: A company can hold assets in its own name and is considered to be a separate legal entity. The shareholders are the owners of the company. Directors are responsible for running the company, although they may also be shareholders.

Trust: In a trust, a company or individual (trustee) conducts business on behalf of the beneficiaries of the trust. This structure is commonly used in family business wherein every family member can become a beneficiary without being involved in running the business.

Business premises

You can choose to set up a home-based business or lease or buy commercial premises. The state, territory and local governments in Australia are responsible for the lease or purchase of commercial property. The regulations, environmental assessments and approvals may vary from one region to another. The benefit of leasing is that it does not require any major capital investment for the premises. But some small business may find it more cost-effective to buy a property.

Australian stock exchange

The Australian Securities Exchange (ASX) is the main stock exchange in Australia and both Australian and international companies can apply for listings. Companies must meet the requirements laid down in the stock exchange listing rules in order to obtain a listing. Getting listed on the ASX is an advantage because the Australian stock market is vibrant and modern and trading opportunities are available round-the-clock.

Trademark

Companies can protect their name from being used by other companies by registering a trademark and domain main.

Taxation

Businesses in Australia must comply with various Australian Taxation Office (ATO) requirements. This involves obtaining specific registrations, reporting your income and expenses, and also maintaining business records. Knowledge of which business expenses can be claimed and which tax concessions you are eligible for can help to reduce excess expenditure.

The structure of your business will determine your tax obligations and the amount of tax payable to the ATO. It will also determine the registrations required by the taxation office. Small businesses generally require the following registrations;

– Tax file number (TFN) – The ATO is able to administer tax with the help of this unique number, which is issued to individuals or companies.

– Australian business number (ABN) – This 11-digit number serves as identification during business dealings with the tax office, government agencies and other companies.

– Goods and services tax (GST) – GST is a tax of 10 percent that is applied on most goods and services sold or purchased in Australia.

– Pay as you go (PAYG) withholding – The PAYG withholding system is used to withhold amounts from payments to employees and businesses so that their annual tax liabilities can be met.

The ATO issues a business activity statement (BAS) to businesses based on their registrations by which they can report and pay tax obligations. With this statement, one can make a single payment for all your tax obligations for each reporting period


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