What is a company?
A company is but one of the many different ways in which to operate a business. Depending on your circumstances or situation, there may be many benefits of operating as a company rather than as a partnership. However, whether a company is right for you will depend on your business objectives, purpose and unique character. A Sydney chartered accountant or Sydney accountant can help you determine which structure is suitable for you. Specifically, Navado’s Sydney chartered accountants and Sydney accountants are highly experienced in helping individuals, families and partners set up new businesses.
A company is a distinct entity, able to be prosecuted, sue or be sued. A company is a separate entity that is able to accrue and dispose of assets and liabilities.
A company must be incorporated under the Corporations Act 2001 as either a proprietary company (limited by shares or unlimited with share capital) or a public company (limited by shares or guarantee, unlimited with share capital or a no liability company). A proprietary company is limited to 50 non-employee shareholders and are less regulated than public companies. They are normally used for the purposes of operating smaller businesses.
Companies are run by directors (either executive or non-executive) who report to the shareholders on profits and loss and are responsible for ensuring the company remains solvent and legally compliant. Directors may be prosecuted personally for failing to carry out their duties or taking action injurious to the company so it is imperative that they act in good faith at all times.
Perpetual succession and limited liability are amongst the greatest benefits that may flow, when operating with a company structure. There may also be a varierty of tax benefits, including the following:-
- superannuation contributions made by a company for employees may be claimed as a tax deduction
- companies may be eligible to make retirement payments to employed family members
- ability to take advantage of fringe benefits tax (FBT)
- the company tax rate is lower than the highest marginal tax rate for individuals
For more information on the benefits of operating an enterprise through a company structure, contact a chartered accountant today. We can conduct a business health check-up to help you determine whether running your business through a company is the most tax effective and profitable approach.
- Our Principal has practiced since 2002
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- Fixed Fees for Company Set-up
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This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Tax or Accounting Advice. It does not take into account your objectives, financial situation or needs or your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.
Date: Dec 04, 2011
Tags: tax accounting, business set-up general
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Tags: tax accounting, business set-up general
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If you require assistance with a Tax or Accounting matter, you should make an appointment to speak to a Chartered Accountant in our Sydney CBD Head Office.
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