SOLE PROPRIETORSHIP
WHAT IS SOLE PROPRIETORSHIP?
A sole proprietorship is a simplest form of business structure that is owned and operated by single individual. Entire business of sole proprietorship business can be operated under the name of its owner. Registration of business name can be done in owners own state in order to protect against violations of trade practices.
FORMATION PROCEDURE OF SOLE PROPRIETORSHIP BUSINESS.
- Australian Business Number is necessary to enroll
- GST registration (if applicable)
- Registration of business name with state authority(if applicable)
- PAYG-W registration(If applicable)
BENEFITS
- Establishing and Administering of sole proprietorship business is an effortless procedure
- A sole proprietor retains management of assets
- Lower Maintenance cost
- Establishing cost of sole proprietorship business is zero
- Minimum compliances are required
- Benefits of Capital gains tax discounts can be earned(if applicable)
- PAYG-W registration(If applicable)
DRAWBACKS
- It is obliged to register Australian business number
- Annually submission of tax return documents
- Submission of Business Activity Statement(Monthly or Annually)
- GST registration if turnover exceeds $80,000
- Acknowledgement of Financial statements(Income and expenditure)
ANALYSIS
An individual who retains minimum or no assets and expecting limited turnover can appropriately operate sole proprietorship business. Settlement of income tax can be done either at the end of the year subsequent to lodgment of Tax Return or Paid through an Income Activity Statement (IAS) during the year and an adjustment can be accomplished at the end of the year Public liability insurance and other indemnity insurance are obliged for sole proprietor to insure. Drawings arise from company wages through owner are constituted in business profits.
