There are four main business structures for a small business:
- Sole trader
- Partnership
- Company
- Trust
Choosing the right operating structure (or combination thereof) before you start a business is critical. Get professional advice on which structure best suits your needs. There may be specific legislation relating to the type of business you wish to start which restricts the choice of structure. Your lawyer will consider the type of business you’re starting and your individual circumstances to help you weigh up factors such as the required capital, how much expertise you need and your business planning.
Each business structure has its own advantages and disadvantages. They will all affect the following in different ways:
- Your taxation position
- Personal legal liability
- The expected lifespan of your business
- The availability of capital
- The flexibility of business operations
FINANCE
Your lawyer, together with your accountant, can advise on the capital required to establish your business. They can advise on The different types of finance available and the extent of your personal obligations under any loan agreement or guarantee you sign. Some businesses, especially those employing substantial numbers of people, may be eligible for federal or state government assistance.
INSURANCE
Take out a suitable insurance policy to protect the assets of the business in case of damage or destruction by a fire or other insurable risk. Your lawyer can advise on matters such as your duty of disclosure and when the risk of loss or damage to property passes to you.
ZONING, PERMITS AND LICENCES
Municipal planning control legislation regulates where various businesses can operate and under what conditions. The location of your business must adhere to local zoning regulations. Often you will be required to obtain certain permits, licences or registration certificates in order to operate your business. You must ensure the business you are planning on purchasing or starting can operate legally from the proposed premises.
Depending on your type of business you may need to acquire BYO liquor permits, food premises registration, factory registration and zoning permits or tobacco registration. Your lawyer can advise you on what permits or licences your business may require.