Structures
A company is its own legal person. It owns its assets, owes its debts, files its own return — and expects you to keep it that way.
What it is
A company is a separate legal entity, registered with the Companies OfficeASIC. It signs its own contracts, holds its own bank account and files its own tax return. Shareholders own it; directors run it; the two are usually the same people in a small company, which is exactly why the distinction gets blurred.
Limited liability is the reason most people incorporate, and it is real — but it is not absolute. It goes when you sign a personal guarantee for the lease or the overdraft, and directors carry duties of their own that do not disappear because the company is small.
The part that trips new directors up is that company money is not your money. Taking it still has to be a salary, a shareholder drawing or a dividend, and each is taxed differently. Getting that mix right is usually worth more than any deduction you will find.
Typically Founders, family businesses and anyone who has incorporated or is about to.
Every year
The obligations that come with this structure, in the order they tend to catch people out.
A balance sheet and profit and loss for the year. The bank, the IRD or ATO, and anyone doing due diligence on you all start here.
An IR4, filed for the company itself. Your own IR3 is separate, and both have to agree with each other.The company return, lodged for the company itself. Your individual return is separate, and both have to agree with each other.
Not a tax return — a yearly confirmation of directors, shareholders and the registered office. It is quick, and companies still get struck off for ignoring it.Not a tax return — a yearly statement of company details with a fee attached. It is quick, and companies still get deregistered for ignoring it.
Shareholder salaries, PAYE, drawings and dividends, plus the current account that tracks what the company owes you or you owe it. This is where most of the tax outcome actually lives.
GST once turnover passes $60,000, and PAYE from the first employee — including you, if you are on a salary.GST once turnover passes $75,000, and PAYG withholding plus super from the first employee — including you, if you are on a wage.
Accounts, the company return, your own return and the annual filing are one job, not four. We do them together so they agree with each other, and we look at how you are paying yourself while there is still time to change it.
Claim my free yearSomething else
Plenty of people run more than one of these at once — a company and a trust, or a job and a rental. We handle the set, not the piece.
Freelancers, contractors, tradies and anyone trading under their own name.
Read it →Two or more people in business together — trades, professional practices and couples running something jointly.
Read it →Family trusts holding a home, a rental, a business or investments.
Read it →Anyone with a rental — one property, a portfolio, or a holiday home let out part of the year.
Read it →Ten minutes to start. No credit card, and we will tell you if you are better off elsewhere.
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Not sure which structure you are in, or whether it is still the right one? Ask.
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