Business Ownership Structures

Before you enter into a contract to purchase a business or investment asset, one of the first things you need to consider is the legal structure of the entity that is to purchase and own the asset.

That key decision could determine implications in respect of taxation, liability of creditors and distribution of profits. 

The four most common structures are: acting as a sole proprietor, partnership, company or trust. 

These four structures are explained in brief during this short video. At Argon Law, our experienced lawyers can advise you on the structure that best suits your business. 

More Information

Before you enter into a contract to purchase a business or investment asset, one of the first things you need to consider is the legal structure of the entity that is to purchase and own the asset.

That key decision has many implications for the operation of your business or investment asset.  This includes implications in respect of taxation, liability to creditors and distribution of profits.

The four most common structures used are:

  • acting as a sole proprietor;
  • a partnership;
  • a company;  and
  • a trust.

As a sole proprietor, you own and run the business in your own name with direct responsibility to creditors.

A partnership is an arrangement of 2 or more people who co-operate, but not as a separate legal entity. All partners are jointly and severally responsible for the debts of the business.

A company is a separate legal entity from its shareholders.  If you use this structure, it is the generally the company, not the shareholders, that is responsible for the business debts.

Individuals or companies can own assets as trustees for a trust.  The trustees are responsible for the business debts and operate the business for the benefit of persons known as beneficiaries.

At Argon Law we can advise you on the structure that best suits your interests, taking into consideration you tax position, appetite for risk and available capital.

If you have any queries about this or any other aspect of property law or conveyancing then please contact us on 07 5443 9988 or[email protected].

Argon Law is a Sunshine Coast law firm based in Maroochydore.  We are commercial lawyers and property lawyers and are eager to assist you in any way we can.

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