Company trader

An incorporated company is a distinct legal entity,

regulated by the Australian Securities & Investment

Commission (ASIC).

A company is a complex business structure, with higher

set-up costs and administrative costs because of

additional reporting requirements.

A company's operations are controlled by its directors and the company is owned by its

shareholders. A company provides some asset protection but directors can be legally liable for their

actions and, in some cases, the debts of a company.

Knowing the main features of a company business structure may help you decide if this structure is

best for your business.

Pros for companies Cons for companies Companies are able to procure investment from outside parties by offering shares.

Shareholders cannot claim their investments in a company as a deduction against their assessable income.

Companies are generally not required to issue profits to shareholders and can use the profits to facilitate growth in the business. However, retained profits are taxed as income of the company.

Companies pay tax at the corporate rate of 30%.It is also essential for a company to have financial accounts on hand in order to submit a tax return.

The Competition and Consumer Act 2010 (Cth) protects consumers whenever they are dealing with a company.

There are a number of costs associated with a company, including an ASIC registration fee and an ASIC annual review fee. If the company is to engage in certain types of activities, then the company must pay licence fees (eg a liquor licence) and such fees are often more expensive for a company than for a sole trader.

Goods and services tax (GST)

A company can register for GST if it is carrying on an enterprise. It can do this on the ABN application

form. A company must be registered for GST if its annual GST turnover is $75,000 or more. The

registration threshold for non-profit organisations is $150,000

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