Australia is a nation of entrepreneurs and small and medium-sized businesses.
In fact, small and medium-sized businesses account for more than 90% of businesses in total, and contribute around $4 billion to (GDP), which is the equivalent of about 32% of Australia’s total economy. SME’s also employ the majority of working Australians.
So, the good news is that if you want to start your own business, then you are not alone!
By and large, governments at both state and federal levels are highly supportive of SMEs, considering them the ‘engine room’ of the economy. Also, there are a lot of good online resources you can access when you’re in the start-up phase.
Currently, there are regulatory and legislative changes being considered that are designed to make it easier for small businesses to operate without being over-burdened by compliance.
Plan ahead
Also, at this time, as Australia emerges from the post-pandemic recession, there is a lot of emphasis on the SME sector to lead the economic recovery and there are numerous grants and other financial assistance schemes small businesses can apply for.
However, it’s also a fact that Australia has one of the most complicated tax regimes in the world. Still, this shouldn’t put you off starting your own business. It just means that when you’re considering setting up a company, then you need to do some thorough pre-planning. One of the first critical steps is determining the structure of your business.
All businesses must be registered
All businesses in Australia, whether they are micro-businesses, family operations, or large multinational corporations, are required to be registered with the Australian Securities and Investment Commission (ASIC), as well as the Australian Taxation Office (ATO). ‘Business structure’ is essentially how the government will classify your business and define your business operations for legal and taxation purposes.
The structure of your business will dictate your GST obligations, superannuation obligations, how profits and losses can be divvied up, and how you report (and how often) to the ATO.
Business structure can also affect what other taxes you pay, as well as what you can claim at tax time. From a legal standpoint, your structure also determines who is liable if something goes wrong.
Therefore, the most important thing to do before registering your company is seeking professional advice about your structure, and make sure that what you set up is going to serve your business as it grows over the long term. Changing business structure down the track is possible, but it can be complicated and time-consuming.
Choosing your business structure
The four most common types of business structures in Australia are Sole Trader, Company, Partnership, or Trust. Within these categories, with the exception of Sole Trader, you also have several options.
You may also choose to set up a Co-operative, an Association, or a Not-for-profit organisation, depending on what you want to achieve, although these are much less common.
Once you are clear about your business structure, let’s say you choose ‘Company,’ the next step is getting your company registered. And this, too, may require professional help to make sure that you register your business accurately. Patricia Holdings, for example, is a specialist in helping companies to get registered, and through an easy online platform, you can complete registration with ASIC in a few simple steps, which should only take about 10-15 minutes.
Once your company registration is complete, your business will receive a Certificate of Registration and any other relevant documentation.
When you have the company registered and you’ve applied for an Australian Business Number (ABN), you’re free to do what you've been wanting to do all along – start your business! Just don’t forget to ensure that you keep your Certificate and Company Register safe, and maintain good record-keeping as time goes on so that you can easily advise the appropriate government department of any changes as your business grows.
