{"id":2416,"date":"2021-04-20T05:37:31","date_gmt":"2021-04-20T05:37:31","guid":{"rendered":"https:\/\/whiz-consulting.com\/au\/blog\/guide-to-starting-a-business-in-australia\/"},"modified":"2025-02-12T12:46:57","modified_gmt":"2025-02-12T12:46:57","slug":"guide-to-starting-a-business-in-australia","status":"publish","type":"post","link":"https:\/\/www.whizconsulting.net\/au\/blog\/guide-to-starting-a-business-in-australia\/","title":{"rendered":"Guide to Starting a Business in Australia"},"content":{"rendered":"

You have decided to start a business of your own! What next? Running a business of your own is not a child\u2019s play,\u00a0and not everyone is skilled\u00a0enough to be a business owner. Not just this,\u00a0starting a business itself is full of hurdles. However, provided with\u00a0the\u00a0right knowledge and resources,\u00a0you can ace your business. As an\u00a0outsourced accounting\u00a0services<\/a> provider,\u00a0we want to\u00a0provide\u00a0you\u00a0with knowledge regarding the accounting and taxation obligations of starting\u00a0your own business, so let us delve into\u00a0it –<\/p>\n

1. Do your research:<\/h3>\n

Starting a business might sound very interesting,\u00a0and your business idea might feel like the best business idea,\u00a0but it might not be the case. It is important to understand the feasibility of the idea, whether there is actually\u00a0a\u00a0need for the product or service you intend to sell,\u00a0or you can create a need for the same. Understanding the market, your potential customer,\u00a0and your competition is winning half the battle.<\/p>\n

In your research,\u00a0you must do\u00a0a\u00a0cost estimation to understand at what rate you can sell your product or service,\u00a0which can help you cover the cost and provide you with additional profit. You can always take\u00a0the\u00a0help of an accountant, as they can help you with budgeting and forecasting your\u00a0business potential. After\u00a0all,\u00a0without profits, a business\u00a0cannot\u00a0survive\u00a0in the long run.<\/p>\n

2. Start Executing, first thing first \u2013 select a business structure:<\/h3>\n

Once you are certain about your business idea, its potential, and the pricing factor, you now have to finalise a business structure that suits\u00a0you and your business.\u00a0The structure you choose for your business is very important\u00a0as it is not something you can change frequently. You must put a lot of thought into\u00a0it as it will impact\u00a0the\u00a0level of control, the tax amount, legal obligations, and how much personal liability is at risk.<\/p>\n

There are\u00a0three kinds of business structures\u00a0commonly used\u00a0in Australia, each of the structures has its own advantages and disadvantages. The business structures are \u2013<\/p>\n

i) Sole Trader<\/p>\n

In this form of\u00a0business,\u00a0you alone own and run the business.<\/p>\n

Level of Control: High<\/p>\n

Tax: Same rate as individual tax<\/p>\n

Legal Obligation: Least as compared to others<\/p>\n

Personal Liability: High<\/p>\n

ii) Partnership<\/p>\n

A partnership structure comprises two or more people\u00a0that\u00a0distribute income or losses among themselves.<\/p>\n

Level of Control:\u00a0Divided among partners<\/p>\n

Tax:\u00a0Partners are\u00a0taxed on their respective shares of profit<\/p>\n

Legal Obligation:\u00a0Slightly more than Sole Trader<\/p>\n

Personal Liability: Divided among partners<\/p>\n

iii) Company<\/p>\n

A company is an entity that has a legal existence separate from its owners and has perpetual succession.<\/p>\n

Level of Control:\u00a0Limited<\/p>\n

Tax:\u00a0Taxed at Company Tax rate<\/p>\n

Legal Obligation:\u00a0Most complex compared to others<\/p>\n

Personal Liability:\u00a0Not liable<\/p>\n

A lot of consideration is required for business structure selection. You must learn about each structure and see what are the legal obligations\u00a0for each structure. This will help you\u00a0to\u00a0avoid any legal consequences in the future.<\/p>\n

3. Registering your business<\/h3>\n

First and\u00a0foremost,\u00a0you need a Tax File Number (TFN). It is required\u00a0regardless of the type of business\u00a0you intend to start. Secondly, you must register for an Australian Business Number (ABN) and Australian Company Number (ACN) in\u00a0the\u00a0case of\u00a0a\u00a0company. You cannot legally start a business without one. You must also register your business name as per the requirements\u00a0of your business structure. ‘<\/p>\n

Once this is done, you must register for all other relevant taxes like\u00a0\u2013<\/p>\n