1. Presentation for INVENT WA by James Irving, Lawyer
BUSINESS STRUCTURES
Presentation for INVENT WA
by James Irving, Lawyer

2. Different Types of Structures
Sole Trader
Trust
Company – Pty Ltd (proprietary limited)
Company – limited by guarantees
Incorporated Association
Co-operative
Partnership
Joint Venture

3. Sole Trader An individual operating on his/her own.
Income is taxed at marginal tax rates.
May need to register business name.
Needs an ABN if income >$75K.
All liability is personal.

4. Trust Relationship: trustee/beneficiary/assets.
Only acts through trustee.
Can own property, incur liabilities and pay taxes.
Doesn’t pay income tax if ALL income is distributed in the relevant FY.
Advantages:
splitting income among beneficiaries
flexibility regarding income and assets

5. Company – Pty Ltd Share capital. Up to 50 members. Limited liability.
Structure: shareholders (members) and board (directors).
Can own property, incur liabilities, and has independent existence.
No tax-free threshold (unlike individuals).

6. Company – limited by guarantees
Instead of shares, has guarantees from members.
Often used by NFP entities.
Minimum 5 members (Pty Ltd can have sole member & sole director).
Has similar powers and structure to Pty Ltd.

7. Incorporated Association
Used by broad membership bodies like clubs.
Must be an NFP:
Can’t be formed for the purpose of securing profit for its members: s.5(1) AI Act 2015 (WA).
Is a corporation: can own property, incur liabilities and has independent existence.

8. Co-operative Popular in agricultural sector. Can be for-profit or NFP.
Democratic structure: each member has only one vote.
Is a corporation.

9. Partnership Can be between individuals or other entities.
Is a relationship that dissolves and re-forms when one partner leaves or a new partner is added.
Has special taxation rules.
To outsiders, each partner is 100% liable for partnership debt.

10. Joint Venture A contractual relationship.
Usually of limited duration (sunsets).
Can involve a SPV (special purpose vehicle) e.g. a company in which the partners own shares.
IP issues: normally new IP will be owned by SPV – what happens when SPV is dissolved?