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 littlebit complex business structure, with more set-up and administrative costs because of additional reporting requirements. Company needs to be registered with the Australian Securities and Investments Commission (ASIC).
Key aspects of a company structure
Is a separate legal entity.
Has limited liability compared to other structures.
Is a littlebit complex business structure to start and run.
Involves higher set up and running costs than other structures.
Requires understanding 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.
The Complexity of Company changes with type of Company like less complexity in Proprietory Companies to more complexity in Limited Companies and Listed Companies