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You can quickly and affordably register a company which will own and operate your business. This will limit your personal liability. A company is a separate legal entity, but can do all the same things you can.  It can borrow money or commence legal proceedings in its own name. A company’s shareholders and directors are not liable for the company’s actions.

A company also offers good tax minimisation opportunities. Unlike a sole trader who is taxed at their personal income tax rate on profits each year, a company only pays the company tax rate (25% to 30%).  It can then distribute these profits at a later date, when it is most tax effective for each shareholder to receive them.

Although the directors manage the company, the shareholders own it and have the right to vote on important decisions. 

The legal obligations owed by company directors are stricter than those owed by sole traders and partnerships. Directors must comply with the Corporations Act. A director can be personally liable if they breach a “director’s duty”, such as by improperly using  company information to gain a personal advantage, trading while insolvent, or failing to pay tax. ASIC can take legal action against directors personally for such breaches.