Before you make the big decision to start a company, you will likely have to think a lot about all of the questions regarding where you start, what you do and what do you need to get started. If you are thinking about starting a company, here are things you need to know.

1. You are not your company it is a separate legal entity. It lodges own tax return, can sue and be sued, owns its own assets and is responsible for its own liabilities. It has its own tax file number, an ABN and an ACN.

2. A company pays a flat rate of tax of 25% if trading and is a "Base rate entity" $25m turnover or less. Alternatively, a company will pay tax at 30% of profit if not trading or has only passive income or income above $25m.

3. Directors are the decision makers and shareholders are the owners. Directors have more liability as they are the ones responsible for the day-to-day trading of the company. Forms (tax & ASIC) lodged on time, super lodged and paid on time, and make sure that the company is trading profitably. Directors have requirements to ensure that the company is running smoothly for the benefit of the shareholders. This includes acting honestly and in good faith and getting trusted advice before making an informed decision about the company.

4. Shareholders are protected under the "proprietary limited" rules - which means owners are limited to the exposure of the debts of the company depending on the value of the shares they own.

5. There are 3 ways to get money out of a company: Pay wages. Receive a dividend. Take a loan out and then pay it back.  Each one has it's pros and cons, and it depends on your other income as well as your intentions as to which is the right way for you.

Running your own business is an exciting time. However, it is also filled with challenges and decisions in which you have to make sure you're making the right ones. Avoid mistakes as much as you can before starting your new business. We're here to guide you!

If you are interested in starting up a company, or chatting to one of our accountants to see if running your business as a company is right for you, then please book an appointment with us here: https://app.acuityscheduling.com/schedule.php?owner=18230665&appointmentType=11521548