Steps To Setting Up Your Business
Setting up a successful business in Australia requires more than just a great idea and the willingness to work hard. Compliance with laws and regulations is essential to avoid costly penalties and damage to your reputation. In this article, we will cover the key steps of a small business set up in Australia.
Legal Structure
Choosing the right legal structure is one of the key first steps to a small business set up in Australia. It determines your level of liability, tax obligations, and how your business is managed.
Common legal structures in Australia include sole trader, partnership, company, and trust. Make sure you have a clear understanding of the pros and cons of each one before choosing the right business structure.
Register Your Business
When setting up a business in Australia, you will need to find a unique trading name and register your business with the Australian Securities & Investments Commission (ASIC). You can try the business name search tool on the ASIC website to check if your preferred business name is available.
Australian Business Number (ABN) Registration
An ABN is a unique 11 digit number that identifies your business to the government and community. It is compulsory for businesses with a Goods and Services Tax (GST) turnover of $75,000 or more to have an ABN.
Tax File Number (TFN) Registration
When setting up a business in Australia, you are required to register for a TFN. This registration can be done when applying for your ABN.
Bank Account
When you set up your business we recommend that you open a separate bank account to keep your personal and business finances apart. It’ll make managing finances easier, keeping track of income and expenses simpler and your tax preparation a lot quicker.
Bookkeeping And Accounting System
Keeping accurate financial records is a key part of setting up a new business in Australia. There are many modern, cloud based accounting systems, like Xero or Quickbooks, to choose from. These platforms will make it much easier for you to record financial transactions, keep accurate records and meet your compliance requirements with the ATO. It will also make your accountant’s life a lot easier.
Register For Relevant Business Taxes
Registering for the right taxes is an important aspect of setting up a business in Australia. Depending on the nature of your business and the amount of revenue it generates, you may be required to register for various taxes.
- The Goods and Services Tax (GST) is a tax of 10% that applies to most goods and services sold in Australia, including imports. If your business has an annual turnover of $75,000 or more, you are required to register for GST.
- Pay As You Go (PAYG) withholding is a system that businesses use to collect and pay amounts from their employees’ salaries and wages to the Australian Taxation Office (ATO). If you have employees, you are required to register for PAYG withholding.
- Fringe Benefits Tax (FBT) is a tax on non-cash benefits provided by employers to their employees or their employees’ associates. Examples of fringe benefits include the use of company cars or providing entertainment to employees. If your business provides fringe benefits, you may be required to register for FBT.
- Business Activity Statement (BAS): Businesses with an annual turnover of $75,000 or more, non-profit organisations with a turnover of $150,000 or more, and businesses involved in certain activities such as taxi and limousine services are required to register and lodge BAS.
Set Up To Succeed
A small business set up in Australia can be an exciting but daunting adventure. You don’t have to go it alone. Our team at Allevi8HQ can provide you with all the bookkeeping, accounting, payroll, BAS and on-going business support you need to succeed.
Get in touch to discuss your business with us.
