Commencing a business as a company

Company structures are one of the most widely used business structures in Australia. Key attributes of a company include:

• • it is a legal entity (distinct from its members), has perpetual succession, can sue and be sued and own property in its own name;
• • the liability of the members of a company is limited to the money they owe on any shares they own and/or for any amount of money they guarantee to contribute upon winding up of the company; and
• • shares in a company may be readily transferred (subject to any restrictions in a company's constitution).

See Commencing a business as a company.

Advantages and disadvantages of a company structure

A company as a business structure has a number of advantages. These include:

• • being a separate legal entity;
• • perpetual succession;
• • ease of transferring interests;
• • flexibility;
• • limited liability;
• • familiarity;
• • favourable tax rates; and
• • protection to the company name.

However, there are also disadvantages to consider. These include:

• • onerous ongoing compliance obligations;
• • complex governing law (ie Corporations Act 2001 (Cth); and
• • lack of privacy.

See Advantages and disadvantages of a company structure.