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Benefits of One company registration

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6/30/2020 11:04:26 AM
Posted: 2 months ago
If you are starting a new venture or looking to grow your business, You may be considering starting a company. Although registering a company can seem like a big step, There"s also many benefits in trading under a company structure. In this article, We"ll outline the 5 benefits of registering your company and how this can see your business soar.

1. You will limit your personal liability
As a sole trader or partnership you are legally responsible for all aspects of your business, Including debts and losses. Further, If you sell a defective product or make an error, You will be personally liable. Running a business this way can be risky, Because it means that your personal assets are also on the line.

By contrast, A company is a separate legal entity and it is an easy way to protect your personal assets from your business actions. Debts which attach to the company will not attach to you, Which means that you can focus on building your business.

2. You will minimise your tax liability
Depending on how much revenue your business brings in, You will likely pay less tax under a company structure. In Australia, The current tax rate for companies and small business is lower than the highest tax rate for an individual. As a sole trader, You are taxed as an individual and your business"s profits form part of your individual income.

In addition, Your company will be entitled to a range of tax deductions for advertising, Education and training and repairs and maintenance.

3. You can avoid conflict with your founders
Registering a company helps immensely if a conflict arises with your cofounder. When you register your company, The control which owners have is subject to the number of shares they own. The owners will have a clear understanding that their investment in the company is not by any pre-registration verbal or written promises. If a dispute arises, Share allocation will also determine who has the most decision-making power.

Similarly, Companies can allow you to separate the ownership and management of the business

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