Different Types of Business Structures

If you have plans to start up a business, it is wise to consult with commercial lawyers first, because there are many things to consider and decide on. You can’t just go into business without first making sure it is done legally.  One of the first things to decide is what type of business structure you will have for your business. Here are some of the main types: –

  • Sole Trader. This is perhaps the easiest type of business to set up and as the name suggests, and may be suitable for a small carpet cleaning operation like Brilliance Carpet Cleaning Perth or something similar with only one person involved. You won’t have a partner or a company structure as such, however you will need an Australian Business Number (ABN). You may also need a business name and a trademark, both registered. A sole trader has full control over every aspect of the business, owning all the profits and all the debts.
  • A partnership is also a relatively simple way to set up your business. Typically it will involve two or more people who are co-owners in the business. As such, they all share responsibility for profits and debts. The co-owners can act on behalf of each other in running the business. A written agreement is an essential component of this type of business, to ensure each partner understands their responsibilities. The ABN and other components similar to the Sole Trader are needed and if there is a silent partner, limited partnership formation is required.


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