Company v Sole Trader Decision Tool
* Please answer these questions
Based on the above facts, it is better for you to set up a:
ESTIMATED TOTAL BENEFIT over YEARS =
ESTIMATED TOTAL COST over YEARS =
ESTIMATED NET BENEFIT over YEARS =
Why are the benefits of a company sometimes so high?
Many people underestimate the benefits of a company, especially if you use the company over a number of years.
Keep in mind that once you create a company, you can continue to use it for the rest of your life (provided that you pay the Annual Statement fee).
The upfront costs are then spread out over the life of the company.
Here's another quote from Robert Kiyosaki of Rich Dad Poor Dad fame:
"If you are considering getting into a business, do not start out on the wrong foot by using a bad entity."
What is the upfront cost of registering a company?
The upfront cost of us registering a company for you is $693 (including GST and Government fee of $444).
This fee does not include ABN, TFN, GST or PAYG registration.
Can I change from a Sole Trader to Company (or visa versa)?
If you have been set up for more than 3 months, then we recommend that you get advice on your specific circumstances. Just call 1800 347 845.
If you have recently set up, then it is no problem to change.
What If I Can't Afford the $693 to Set Up a Company Now?
Our reason for existing is to help starts up and small business. If you are unable to afford the $693, call us and we may be able to help somehow.
What assumptions have you used in this tool?
- This tool assumes that you are making average profits for a business of your size and industry
- The 3 overall benefits of a company are (1) different tax implications; (2) limited liability in the event of someone suing you, and (3) greater learning about the difference between being a worker and being an entrepreneur (see next point); (4) fundraising; and (5) easier sale of business. A conservative value has been applied to each of these benefits.
Disclaimer - This tool is intended to provide general input only for those people considering whether to set up as a sole trader or company . It does not take the place of specific advice on your circumstances. Also the benefits and costs are necessarily based on estimates. The point of the tool is not to provide an exact measure but simply to give start ups a sense of the benefits and costs of a company over a sole trader. Also note that this tool does not make any claims as to tax deductibility or that you can rely on a company in lieu of insurance coverage. For specific advice or help, call us on 1800 distil (1800 347 845).