HHH Partners :: Chartered Accountants :: Number one in numbers
  • HHH Partners,accountants,business,taxation,financial planning,wealth creation,Emerald, QLD
  • HHH Partners,accountants,business,taxation,financial planning,wealth creation,Emerald, QLD
  • HHH Partners,accountants,business,taxation,financial planning,wealth creation,Emerald, QLD
  • HHH Partners,accountants,business,taxation,financial planning,wealth creation,Emerald, QLD
  • HHH Partners,accountants,business,taxation,financial planning,wealth creation,Emerald, QLD
  • HHH Partners,accountants,business,taxation,financial planning,wealth creation,Emerald, QLD
  • HHH Partners,accountants,business,taxation,financial planning,wealth creation,Emerald, QLD
  • HHH Partners,accountants,business,taxation,financial planning,wealth creation,Emerald, QLD
  • HHH Partners,accountants,business,taxation,financial planning,wealth creation,Emerald, QLD
  • HHH Partners,accountants,business,taxation,financial planning,wealth creation,Emerald, QLD
Companies

What is a Company?

A company or corporation is a legal entity that is separate from its members. When you form a company, you form an imaginary legal person which can hold and dispose of property, take legal action and sign documents. Because of this separate legal entity a company can have assets and liabilities and make profits and losses quite separately from its members.

Advantages

  • Separate legal entity from the shareholders or members, as well as those who control its operation.
  • The limited liability nature of a company. Shareholders aren’t normally liable for debts unless they’ve given a personal guarantee or acted negligently.
  • Companies face a lower tax rate than the top marginal rate for individuals.
  • Perpetual succession
  • Transfer of ownership: Shares can be bought and sold without affecting the operations of the company
  • Dividends: A company can pay dividends to shareholders which include tax credits (i.e. franked dividends)

Disadvantages

  • Higher setup costs
  • Greater ongoing compliance costs
  • More complex reporting obligations
  • The requirement for separate company and personal records
  • Amounts paid to directors are subject to taxation (i.e. withholding) and other on costs such as workers compensation. Distributions cannot be made as simply as done in a partnership.
  • High penalties for director negligence
  • As companies are governed by the Corporations Act, there are strict rules in regard to how a company and its officers should behave.
  • Fringe Benefit Tax may apply to personal use of company assets

Tax Treatment

A company pays income tax on profits as a separate legal entity at the rate of 30%.

Contact us today for more information Back to Services

Disclaimer: This fact sheet is intended to be general information. It is not a substitute for legal or other professional advice. HHH Partners does not accept responsibility for loss to any person, who either acts or does not act because of this fact sheet.

Image
Asgard
Copyright HHH Partners © | Disclaimer | Privacy PolicyOnline software for accountants by Wolters Kluwer