There are several advantages of being a company rather than a sole trader, depending on your business goals and needs. Some of the main advantages are:
Limited liability: As a company, you are not personally responsible for the debts or losses of the business. This means that your personal assets are protected in case of insolvency or legal claims.
Tax benefits: As a company, you pay tax at the corporate tax rate, which is lower than the highest individual tax rate. You also have more flexibility in how you pay yourself and your employees, and you can access more tax deductions and concessions.
Growth potential: As a company, you can raise capital by issuing shares to investors, and you can also attract more customers and suppliers by having a more professional image. You can also expand your business by merging with or acquiring other companies.
Of course, there are also some disadvantages of being a company, such as higher setup and administration costs, more legal and reporting obligations, and less privacy and control over the business. You should weigh the pros and cons of each business structure before deciding which one suits your needs best. You can also consult a professional adviser, such as an accountant or a lawyer, for more guidance.
If you need help, reach out to us at www.createabusiness.com.au.
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