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Company Set Up

Company

If you operate your business as an incorporated company, the business is a distinct legal entity that is regulated by the Australian Securities and Investment Commission (ASIC).A company is a more complex business structure. A company must hold an ABN number and Tax File Number.

Proprietary Companies Elements 

Ownership Structure:   1 to 50 shareholders;   Shareholders share profit based on share portion;  Shareholders responsible for electing Directors.  Control and Management:  Directors responsible.  Risk and Legal Liability:   Limited Liability - Shareholders are not liable for the debts of the business. Personal assets are protected.  Taxation:  Pays tax on its net profit at a flat rate of 30%;  No Capital Gain Tax benefit. Company loans to shareholders carry risk:   Loans from a company to shareholders without proper structuring are regarded as tax avoidance under Division 7 of the Tax Act. They carry significant penalties and advice should always be sought from tax accountant.  Compliance and Legal:  Regulatory authorities closely monitor;   Severe penalties apply for breaching the Corporations Law. Paying superannuation:  Company must make superannuation contributions for any eligible workers it employs, including you as a company director. Business Wind Up or Sale:   Company continues as a legal entity in the event of the death, retirement, bankruptcy of the owner or change in shareholders;   Company can be sold (capital gains tax applies to the sale of companies).

CPA TTI TPB NTAA PWC MYOB XERO ANZ