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This is not advice. Items herein are general comments only and do not constitute or convey advice per se. The information contained in these articles is for guidance only and should not be relied upon without obtaining professional advice having regard to your direct circumstances.


Starting Up Your Business

1.  Business Plan

Before you register for an ABN and start trading it is vital to sit down and flesh out the finer points of your business idea:
  • Consider the different business structures – sole trader, partnership, company or trust – and decide which one suits your needs best.
  • Understand how the business intends to trade and what it requires.
  • Set up costs, ongoing compliance costs and tax requirements of your business structure.
  • Detail your product offering, product mix and your sales and marketing activities.
  • A clear business plan can also help you further down the track to review results, keep focused and achieve your business goals.
  • For more details and a business plan template refer to our article on Business Planning: 
2.  Structure
  • Sole trader - Trade as an individual, using a registered trading name if required, with compliance to the ATO
  • Partnership - Trade as a group of individuals, using a registered trading name if required, with compliance to the ATO
  • Company - Trade as an incorporated entity with directors and shareholders, with compliance to the ATO and ASIC
  • Trust - Trade as a trust with corporate or individual trustees and have the ability to distribute income, with compliance to the ATO and ASIC

3.  Registering your business

For your new business you will need to: 4.  Banking
  • You should open a separate bank account for your business so as not to confuse personal and business funds
  • Consider your business needs when setting up a bank account, for example, whether you will need merchant facilities to process payments, and how you plan on paying suppliers - by internet transfer or cheque.
  • Inform the bank of your business tax file number once you receive it from the ATO
  • You may choose to set up a separate bank account to hold funds for the GST, PAYG and superannuation liabilities
5.  Insurance
  • There are various types of insurance that may be applicable to your new business –

                      · General Business

                      · Public Liability

                      · Indemnity

                      · Workers compensation

  • You should understand the potential risks to your business or personal assets that insurance may assist in reducing.
  • If your business will have employees or contractors you should have a clear understanding of who is and who isn’t covered by workers compensation insurance.

6.  Employment

If part of your business plan is hiring employees there are a number of steps necessary to meet all legal requirements as an employer:

  • Document the agreement with a job description and letter of offer
  • Complete a tax file number declaration form for each employee
  • Make sure you are registered for PAYG withholding with the ATO
  • Agree on a gross rate to be paid (before tax), either hourly wages or annual salary
  • Understand how much tax needs to be taken out with each pay
  • Contribute superannuation on behalf of employees at 9% of gross wages each quarter
  • Take out a Workers Compensation policy
  • For full details refer to our article on the process for a new employee:

7.  Record keeping

Good record keeping practices will help you:
  • Monitor the health of your business
  • Manage your cash flow
  • Complete your activity statements and annual tax returns on time
  • Meet your legal requirement from the Tax Office that you keep business records for at least five years or, if you are employing people, at least seven years

You should assess what accounting system will best suit your business needs and budget

  • A computer accounting program like MYOB will allow you to reconcile bank accounts, input payroll and generate reports
  • A simple business spreadsheet to record income and expenditure and calculate GST if necessary. These spreadsheets are available to download from our website:

8.  Invoicing

Invoices can be hand written, carbon copies or generated from computer programs like MYOB but all need to contain certain details:

9.  Compliance lodgement

Depending on your business structure and registration there are a number of tax compliance lodgements that are required by the ATO:
  • Businesses registered for GST and PAYG withholding will need to complete and lodge monthly, quarterly or annual activity statements
  • GST can be reported on one of two basis – cash or accrual
  • Cash basis – GST collected is reportable once the invoice is paid
  • Accrual basis – GST collected is reportable from the date of the invoice
  • Sole trader – business income and expenses will be included in the individual’s annual personal tax return as a business schedule
  • Partnership – an annual partnership tax return and an individual tax return for each partner is required
  • Company – an annual company tax return and financial statements are required
  • Trust – an annual trust tax return and financial statements are required 

10. Review

It is essential to your business’ future that you review on a regular basis to:

  • Ensure your various tax compliance issues are kept up to date
  • Monitor your business performance in regard to your initial business plan and structure


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