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Starting a business can be tricky, especially if you're not sure where to begin. But that shouldn't stop your dream of owning and running your own company from becoming a reality. So, even if you're not certain where to start, this guide will take you step-by-step through the process of starting a business in Australia.
Take the hassle out of starting a business with professional help for each step of setting up your business.
Structuring your business is the integral first step. Without knowing what kind of business you want to start, there's no way to move forward.
There are four common entities for prospective business owners who want to do business in Australia: sole trader, partnership, company or trust. You'll need to decide which structure makes sense for your business.
This is the most straightforward way to set up a business in Australia, with fewer startup costs, less paperwork and minimal working capital required.
But this type of entity comes with unlimited liability — which means that should you find yourself in debt, potential creditors have the right to claim against your personal and business assets.
For this entity, you simply create a contract between one or more partners to conduct business. In a general partnership, partners manage the business together and share legal liability. With limited partnerships, general partners manage the company, while liability and other contributions are limited for other partners.
In a partnership, just like in a sole proprietorship, you are ultimately responsible for business decisions. This means that if a contract is broken, you could be financially liable.
Unlike a sole proprietorship or a partnership, a corporation is not tied to specific individual owners. It's a limited liability entity, whereby the legal structure of your business is a separate entity and you assume no risk of personal liability for debts or other obligations.
Because corporations are complex and closely regulated, they are more expensive to set up.
A trust obligates a trustee to hold property or assets (such as business assets) for the benefit of others, known as beneficiaries. This trustee is responsible for the trust's operations, but you can set up another company as a trustee, providing some asset protection.
When you're starting a new business, it can be a good idea to hire a financial advisor. This could be a tax, business or legal advisor.
A financial advisor is someone who holds an Australian Finance Services licence (AFS licence) and who can help you navigate the tricky waters of registering your business, risk management, organising your insurance and retirement planning. These are all important factors to consider when starting your own business, and it can help to get a professional's opinion on the matter.
To become an official Australian business, you will need to register for your Australian business number (ABN), business name and goods and services (GST). You can register a business for one year or three years. After this period, it must be renewed.
You can perform all of these registrations online. However, if you prefer to do them by phone or via a registered agent, that may also be an option.
An ABN is a unique 11-digit number used to identify your business to the government and community. You will need an ABN for various tax reasons and to apply for any form of business finance. To apply for an ABN, visit abr.gov.au.
You will need to have decided on your business structure before applying for your ABN. Applications for your ABN will vary depending on your business structure, but generally you can expect to need the following:
Your business will usually need a name. However, if you're a sole trader, you do not need to register a name for your business unless you wish it to be something other than your own name. To register your business name, you can go to register.business.gov.au. You can usually register for a business name and an ABN at the same time.
When naming your business, it's important to consider the following:
You can register for GST online at abr.gov.au. You can also register for GST at the same time as your ABN and business name, but please note that registering for GST is optional if your business does not meet certain criteria. It's only necessary to register for GST if your business does the following:
Before you embark on starting your own business, it's a good idea to get to grips with what sort of tax payments, record keeping and exemptions you can expect:
The licensing and permits that you'll need will depend on a number of factors. This will include things such as what good or service you are planning to provide, your location and whether you are planning on hiring employees.
To find out what licensing or permits you will need for your business model, visit ablis.business.gov.au.
Most Australian businesses require mandatory insurance. The following are the two most common types of insurance that businesses need:
The type of business insurance that you require will depend on the size and structure of your business.
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