When should you start thinking about taking your business to the next level? When should you be setting up a personal training company? It’s very important to think about the best business structure for your personal training business. If your business grows and flourishes, you might want to think about registering your business as a company.
What is the structure of a company?
A company is a distinct legal entity, separate from its officers or shareholders. All companies are governed by the Australian Securities and Investments Commission (ASIC). ASIC administers the Corporations Act (2001) and other relevant legislation.
The advantages of setting up a personal training company
- Generally, shareholders have limited liability. They can lose the value of their shares but not be held liable for the company’s debts.
- All legal policies etc are in the company’s name, rather than the names of its directors and managers
- A company can trade anywhere in Australia
- A company structure ensure continuity in ownership and management in the event of disability or death of the key people.
- A company’s tax rate is lower than that for individuals.
The disadvantages of a company structure
- A company is subject to more regulations than other business structures.
- There are complex and costly rules for setting up and running a company
- Directors can be held liable for a company’s debts if they fail to meet their legal obligations
- The company’s profits that are distributed to shareholders are taxable.
Seek advice when setting up a personal training company
Selecting the best business structure for your personal training business is an important decision that will have significant implications for your business. Consult both legal and tax advisers for professional advice and guidance. In addition, you can contact ASIC and the Australian Taxation Office (ATO) for more detailed information about setting up a company and the legal and tax implications.