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Partnership, Trust, Company or Just Me?
The following information is intended to give you a brief overview of different trading options that are available to you in business. For more detailed legal advice that is specific to your circumstances contact one of the team at Ward Adams Bryan-Lamb.
A sole trader operates their business on their own and is responsible for all aspects of the business from managing staff to looking for new work and meeting all regulatory requirements, such as GST and tax returns. It is one of the easiest forms of business to set up, but if your personal assets are also in your own name then the lack of separation between your business and personal assets can create an unnecessary risk and may not be the best option for your business operation. There are also tax related issues to consider before deciding what structure would be best for your business and we can advise you in relation to these.
Partnerships involve two or more people owning a business - sharing resources, expenses and responsibilities. Each partner shares the losses and profits of the business. A business partnership operates in accordance with a partnership agreement. It is particularly important to get legal advice at the right stage, preferably before entering into a partnership and at Ward Adams Bryan-Lamb we can assist through every stage of the process.
A company is an entirely separate legal entity and is a useful way to separate your business affairs from your personal ones. Company incorporation is a straightforward process provided that you have taken the right advice, ensuring that you consider all of the issues that may be relevant to your business before incorporation of your company is very important. Questions such as who should be a director, how many shares should the company have and whether your company should have a constitution are best thought about in advance and we can assist you throughout the process, including completing incorporation of the company for you.
Trusts are set up when you transfer something you own to trustees to look after for the benefit of someone else and in a business context are commonly used to protect your personal assets from having to be used to deal with or business related debts. It is also possible to create a trust to operate your business, commonly known as a trading trust however we recommend you contact us for legal advice if you are considering doing this as there are a lot of issues to think about before doing so.