What is the difference between a Company, Business and a Partnership?

Company

A company is a business structure that is a complete separate entity from its owners/directors. A company has the same rights a person. A company can incur debts, sue someone and be sued. A company has:

-Directors: They control the company; and

-Shareholders- They own the company

-Secretaries- Officer of the company/main person to deal with company records etc.

A company has to comply with all of its obligations under the Corporations Act 2001. It also has to lodge tax returns with the Australian Taxation Office as the company itself earns an income.

Partnership

A Partnership is a business that is made up of two or more people or two or more companies or a combination of both people and companies. These people distribute any of the partnership income or losses between themselves.

Partnerships have minimal reporting requirements.

A Partnership does not pay income tax itself on the income earned, each partner pays tax on the share of the net partnership amount they receive. A partnership Tax Return does need to be lodged with the Australian Taxation Office.

Generally, in a partnership all partners are equally responsibility and management of the partnership/business.

Business

Being different to a company, a business can be owned and operated by a person, company, a Trust or partnership. The legal rights fall onto the business owner whether it be a company, a person or partnership. The owners of the business are responsible for the business debts, if any and the running of the business. Aubiness sis really like a trading name.

You can change your business structure throughout the life of the business.

An ABN may be used when you own a business. Generally, you only require an ABN if you are required to be registered for GST. This is something to speak to your accountant about.

If you are need any assistance in relation to a company, business or partnership please contact our office on 9707 1155.