Running a business through a company
The key attributes of a company are:
- It is a separate legal entity.
- It can sue and be sued.
- Liability of its members is limited to the money they owe on shares and the contribution they have guaranteed on winding up.
- Succession or transferring of interests is simple.
- Business tax rate of 30% or 27.5% for lower company tax rate (if eligible).
The main disadvantage of running a business through a company is that it is quite onerus in terms of reporting, directors duties and complying with the Corporations Act in general.
Wilding & Co Lawyers can help clients establish a company to run their business. You will need to consider the following before registering a company:
1. Choose a company name;
2. Do you also need a business name/s which are different from your company name?
3. Who is going to be an officeholder as you need at least one (sole director, Director, Secretary)?
4. What company constitution will you use (model constitution provided by ASIC or your own constitution).
5. How will the shares be distributed. For example, in many cases where there are three shareholders, the shares are divided equally?
6. Will you need a shareholders agreement to establish who is the managing director, how deadlocks are broken etc.
To find out more about whether establishing a company is right for your business, call Wilding & Co Lawyers to get a free 15 minute consultation.