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Business Structure for Contracting

Discussion in 'Small Business' started by Graeme, 9th Sep, 2015.

  1. Graeme

    Graeme Well-Known Member

    Joined:
    26th Jul, 2015
    Posts:
    258
    Location:
    Melbourne
    I've spent the last few years IT contracting in the UK, and the best way to go there is to structure yourself as a limited liability company. This gives you a degree of protection, and there are also tax benefits if you dodge the IR35 test for a disguised employee.

    I'm now in Australia, and looking to set myself up to provide IT services. The three options I'm considering are:
    • Sole trader.
    • Private limited liability company.
    • Registering my UK company with ASIC, and operating a local branch.
    I'm tempted to go the sole trader root for cost and simplicity reasons. I was wondering if anyone has any inputs on whether this is a bad idea, or if there are benefits going for a limited liability company.

    Thanks.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Consider the alienation of personal services income aspects too.
     
  3. Graeme

    Graeme Well-Known Member

    Joined:
    26th Jul, 2015
    Posts:
    258
    Location:
    Melbourne
    Thanks Terry.

    The alienation of personal services income rules seem similar to IR35. I'm not sure if I'd get around them as a typical IT contractor, as I'd be expected to be on site.

    I might set myself up as a sole trader in the short term, and then upgrade to a limited company in three to six months. Still thinking...