The topic of the week just gone was “structure”.
Each person in business must have a “trading entity”, and each investor must have an “investment vehicle”…but what do we mean by entity and vehicle?
Essentially, these terms all refer to the structure under which you operate. There are a number of different legal structures that can be used for business or investment operations and the type of entity you use will depend on a number of factors.
It is not uncommon for people to refer to their “company”, when in fact they are talking about their “business name”, as such it is important to be 100% confident of the structure you operate within, as it impacts on your tax result, your liability and also ownership of assets!
The type of structures available for business and investment purposes include:
- sole trader
- superannuation fund
- not for profit
Over the coming weeks I will be taking a more detailed look at each of these – but please, I do ask you to remember that any information provided in this space is general in nature and should only be used in conjunction with personalised advice from your accountant.