Join our investing community

Company Questions

Discussion in 'Accounting, Tax & Legal' started by vandalic, 28th Aug, 2008.

  1. vandalic

    vandalic Active Member

    Joined:
    2nd Jan, 2007
    Posts:
    35
    Location:
    Brisbane, QLD
    To company owners and/or accountants I wanted to get your high level feedback on if you think this situation would be better suited to a company structure or just operate as a sole trader with ABN, etc.

    I'm currently a PAYG full-time permanent employee of a company. I am looking to increase my income on the side with a bit of online business which I'd say would be minimal in the first year... perhaps 5-10k?

    To allocate associated income and expenses accordingly and given the small size should I just setup an ABN and just report a yearly BAS? I am in the 40% tax bracket at present though perhaps the associated fees with setting up a company may not be worth my while given the small income? The legal entity seperation and personal asset protection is a plus though...Any other way to protect personal assets if I was to just use an ABN?

    Is there a variety of reporting required depending on the size of the company? i.e. With minimal income could I just do a simply yearly financial lodgement?
     
  2. bcruik

    bcruik Member

    Joined:
    24th Jul, 2008
    Posts:
    6
    Location:
    Brisbane, QLD
    What type of risk does the new 'online' business pose?

    If it could possibly bankrupt you financially than you might find a company is the way to go, otherwise getting getting an ABN will be much cheaper :)

    Keep in mind starting up a company is cheap (about $500-$800), with yearly on goings of about $700-$1500 (getting accounting to lodge return + annual ASIC fee)...

    Make sure you know your legal obligations of being a company director etc...