1. Yvette Bender

2.  Sole Proprietor  Partnership  Company  Trust

3.  A sole trader is an individual who runs the business without partners or a company structure. The sole trader has full control of the business including ownership of all profits and responsibility for all debts and

4. Advantages  Simple structure  You are your business and make all decisions  Inexpensive to establish and operate  Least reporting requirements  Your losses may be offset against any other income or future earning (over a set amount) Disadvantages  You are your business – business operates only if you work  You are personally liable for all business debt  You continue to pay tax at personal income tax rates  Fewer options to raise finances may limit your business

5. SOLE TRADER Registers an ABN Can choose to register for GST and pay quarterly End Of Year Individual declares Income - Expenses = Profit to ATO Tax Paid on Profit only

6.  A partnership involves two or more co-owners participating together in a business. A partner may be an individual or a company and each partner shares in the responsibility and profits of the business.  It isn’t a legal requirement but it is prudent to draw up a partnership agreement. In the absence of this, the law will assume that each partner has an equal share in the business. It is advisable to have a solicitor prepare the partnership agreement

7. Advantages  Inexpensive to establish and operate  Ability to spilt income on level of ownership  Responsibility of the business is shared  Ability to raise finance for the business is enhanced  Capital losses may be offset by other non-business capital gains derived by the individual owners Disadvantages  Each partner is fully liable for the full debts of the partnership  There is limited flexibility in distributing profits from property  Any profit made by the business is split into shares for each partner; therefore rendering a credit viable sum of money into a possibly non-credit viable sum NOTE: If the partnership does not have a Partnership Agreement a court will assume the split was an even share. In the case of a two person partnership - 50% each. A Partnership Agreement is a legal binding document. (it is advisable to have a solicitor to draw it up but does not have to be written by a solicitor or a lawyer so long as it has been signed by both parties and witnessed by a neutral person.

8. PARTNERSHIP End Of Year Partner 1 -50 %Partner 2 - 50% Partners split all profits from the year’s turnover and pay personal tax on each share – regardless of the amount of their yearly drawings If Partner 2 has a share of 50% of a $40,000 profit then they have to pay tax on $20,000 ie. 50% of $40,000 Even if their drawings were only $15,000 Partner 1 may have income from other sources, therefore income from all sources must be added together and tax paid on the total = Gross Taxable Income Registers an ABN / GST paid quarterly Registers a Tax File Number Partnership does NOT Pay Tax Partnership declares Income - Expenses = Profit to ATO with the % split to each partner

9.  A business may operate as a separate legal entity in the form of a company. This is a more complex form of business structure governed by Corporation Law, which covers how a company operates and the duties of the directors.  A business with a proprietary limited company structure is considered as a separate entity from the people running the business. A company structure requires at least one director and one shareholder/member to be appointed. The shareholder(s) provides finance to the company, while the director(s) has serious responsibilities to operate the business according to Corporation Law.

10. Advantages  The company is a separate legal entity, which may enter into agreements, can be sued, can sue others  Retained profits are taxed at the company income tax rate  Ease in attaining ownership in the company by acquiring shares  Ease of ownership change  Continuity of the company’s existence – not dependent on the owners Disadvantages  Set up, administrative and operating costs are high  Increased statutory requirements, for taxation and Corporation Law  Revenue and capital losses must be retained by the company – cannot offset owners’ incomes

11. Individual declares income to ATO pays Income Tax PTY LTD COMPANY Purchase a shelf company Set up directorship You become an employee of the company Company liable for employee entitlements ie: wages, PAYG, super, workers comp End Of Year Company declares Income - Expenses = Profit to ATO pays Company Tax on Profit Only

12.  Is only valid for the state it is registered in  Period of registration is 3 years  Certificate must be displayed  Registered name must appear on all stationery  Trade Marks are Australia wide and overrule Business Name Registrations

13.  Trade Practices Act  Anticompetitive practices  Unconscionable conduct  Unfair practices ▪ Product safety ▪ Conditions and warranties  Equal Opportunity  Occupational Health and Safety