News

Thinking of changing from sole trader to a company?

Posted 22 May, 2017

Source: ATO

As your business develops you may need to adapt to changing needs. One common change is moving from a sole trader to a company business structure.

It’s important that you understand the key differences between these two structures before making the change, because it can affect how you run your business.

Use the Key differences between sole traders and companies checklist to guide you through important points people often misunderstand about business structures, such as:

  • taxes
  • liabilities
  • responsibilities
  • asset protection
  • ongoing costs.

Knowing the key differences will help you understand which business structure will work best for you as well as your obligations, so you can get things right from the start.

If you choose to operate as a company, it’s a good idea to read the ASIC guide for small business directors. The guide explains your role, responsibilities, and potential personal liabilities as a director.

Use the checklist to test your knowledge before making the change.

Remember, the Bright Wealth team is here to help you with any tax and super advice.