| There are several different kinds of companies you | | | | company so it can take more time and work to make |
| can start if you want to go into business in Australia. | | | | decisions and changes in the company. Pty Ltd |
| The companies can be sole proprietor, partnership or a | | | | companies are also taxed differently, actually they are |
| proprietary limited company, also known as a Pty Ltd | | | | taxed on company tax. This is called the corporation |
| company. | | | | tax and it is 30%, as a sole proprietor or partnership |
| It is simple enough to know what the sole proprietor | | | | you aren't taxed this way, but of course there are |
| and the partnership involve. But it can be difficult to | | | | pros and cons of this tax as well, depending on how |
| understand what the Pty Ltd company is. Let's first | | | | much money the company makes. |
| take a look at the pros and cons of starting a Pty Ltd | | | | Another con for Pty ltd companies is when you want |
| Company. | | | | to break them up, or close the company, there is a lot |
| Pros- | | | | more involved because of shareholders, and who |
| As a Proprietar Limited company the company itself | | | | owns the company and such. This is part of the |
| stands legally as a separate entity. That means it is | | | | company being so complex in the way it is set up, |
| liable for itself. In the Pty ltd company there are share | | | | which again has its good and bad points. |
| holders and their liability to the company is limited. This | | | | One last con of having a Pty Ltd company is the |
| means that when they invest into shares they are only | | | | directors have a lot responsibility. In addition to |
| risking their investment. They can't lose more than that. | | | | everything they are responsible for with other |
| An individual or a group of partners can start a Pty Ltd | | | | company structures, they also have to follow many |
| company. This provides a lot of freedom for who you | | | | rules as outlined in the Corporation Law. This means |
| want to bring into the company in the early phase of | | | | they have to be especially careful to consider all |
| business. Another benefit is that the company is not | | | | options for the company and make sure all applicable |
| terminated by the death of a shareholder nor a | | | | guidelines are being followed. This could be very time |
| bankruptcy of a director or shareholder, because it is | | | | consuming and it may help to have additional directors |
| an entity of itself. Additionally minors are allowed to be | | | | because of all the work involved. |
| shareholders as well, giving you that much more room | | | | The structure of a Pty Ltd company is far more |
| to get investors. | | | | complex then sole traders. But they usually have a lot |
| Cons- | | | | more room for expansion and are more attractive to |
| On the other hand Pty ltd companies tend to have | | | | investors. While it might cost more to start a Pty ltd |
| higher initial costs and the on-going cost of business is | | | | company, the ends may justify the means if you can |
| also usually more. There are more people in the | | | | handle the extra work and complexity of the structure. |