Episode Summary – Choosing your Business Structure with Helen Kay
Helen Kay joins us on the show to chat about Business Structures. What are they? What are the common types of business structures you’ll need to understand before you start a business? Are there differences differences from a tax perspective? If you are already in business, can you change your business structure? We tackle these questions and more on this episode of the “Should I Own a business?” Podcast.
Helen is a commercial Lawyer and the principal at Rise Legal. As a small business owner herself, Helen has a tremendous empathy for small business owners and that’s one of the reasons that we love having Helen on the show. The other is that she likes a laugh!
Links and resources – Rise Legal
Rise Legal – website
Helen Kay on LinkedIn – https://www.linkedin.com/in/helenkay-thecontractslawyer/
Thinking about Business Structures can seem a little daunting when you’re first thinking about starting a business of your own.
You might be asking yourself should I become a sole trader or sole proprietor as it is known in some countries or do I need to create a company? And what about a partnership? It can all seem a little overwhelming.
Today, I have the absolute pleasure of welcoming a new contributor to the show.
Helen Kay is a commercial lawyer and owns her own practice called Rise Legal.
The reason we asked Helen to join us on the show is not only for her extensive legal knowledge and expertise but because she has an amazing empathy for small business owners as well as those in the planning process to start or perhaps buy a business.
Helen loves helping small business people and she also loves a chat and a bit of a laugh as well so she is our kind of lawyer and I know that you’ll get a lot out of what she has to say.
What is a business structure?
A Business Structure is the foundation and how you set yourself up from a legal perspective when entering into a business.
Most people won’t necessarily know which will be best for them so we recommend people speak with a Lawyer prior to choosing a structure.
Some factors to consider relate to how the different structures may be treated from a Tax perspective.
Others include the industry you plan to operate in and matters such as asset protection.
Consider working backwards from your goal to assist in choosing the best structure for you.
How do you choose a business structure?
Helen suggested that it is rare for her to recommend setting up as a sole trader (or proprietor) when commencing a Business.
If your business activities will include things such as Invoicing clients, buying supplies, purchasing vehicles or other plant and equipment and you own a home or other asset it may be a good idea to speak with your Lawyer about the possibility of becoming a Company.
It can also, in some circumstances, be hard to work with others within a sole trader structure.
What are the most common types of business structure?
Sole Trader or Proprietor, Company and
What are some of the key features of each?
Sole trader –
easy and inexpensive to establish
still some legal obligations
unlimited liability and all your personal assets are at risk
Separate legal entity from you as the owner
Marginally more expensive to establish
Money the Company earns belongs to the company
Joint and several liability
Which professionals should someone consult when thinking about the best business structure for them?
You should always engage the right professional to advise you establish your business in the right way. Your Lawyer and Accountant are important experts to involve in the establishment of your new business.
Helen suggests that you choose a Lawyer or Accountant with extensive experience in dealing with Small Business. Equally, choose someone you enjoy working with.
Can you change your structure down the line?
Yes, you can.
Notes: For those amongst you who are a part of our international audience just be mindful that Helen is an Australian lawyer (despite the English accent!) and mentions a number of terms that are peculiar to Australia so the idea there would be to check out the corresponding terms and laws in your country.
And the second thing is just to note that the information Helen talks about during our chat is very general in nature so it’s really important that you don’t rely on it in making any decisions about your own circumstances – we certainly recommend that you consult with a lawyer who can take into account your personal circumstances before giving you any advice.
Special offer from Helen Kay at Rise Legal
If you are an Australian business owner and have some questions about business structures or indeed any other area of commercial Law, Helen has been kind enough to make herself available for a free 15 minute chat.
Simply click on the following link to be taken directly to Helen’s booking page.