4 replies to this topic

[Alison.Moore]

I am planning to put my shop in internet and now I am thinking, whether I should first put it online and then after I get 1 order register my business, or should I first register my business and then put it online...Which business structure did u choose at first?Sole trader, company or partnership?I am from Australia.

[jhande]

Gee Alison, that's kind of like saying - "I'll drive a car without a license until I get caught."

If I were you, I'd start reading here - http://www.business.gov.au/Business+Entry+...ne+business.htm

For me here in the States (actually my state) I needed a business ID# before I could purchase my items wholesale. Actually all I need is my business ID# since I am operating as a Sole Proprietor (sole trader) and using my name in the business name.

It's tempting to save money and see if things workout. But I'd recommend going the legal route so you don't get caught with your pants down.

Just my 2 cents!

[WoodsWalker]

Hi Alison,

Here in Canada, you have the option of not registering or charging federal taxes to your customers if you will be doing less than a certain amount of business per year (I think it is $30,000). This only works for sole proprietorships, where you and your business basically have the same legal identity. It means you will be doing business, legally, under your own name, and although you could name the business, it would not be a legal entity in any sense - e.g., a bank would not open a business acccount for it, etc.

So obviously this is simple, but there are certain disadvantages!

The next step is to register a business name for the business, which of course alerts the "feds" that you should be collecting tax if you are over that $30,000 mark. This works for sole proprietorships and simple partnerships. The business now has a legal identity and can get bank accounts, etc. If you want to run an online store, you'd probably rather that your customers' VISA bills said that your business name had charged them, rather than "Alison Moore" had charged them.

In Canada we also have provincial business registration processes and provincial tax regulations.

I suspect it is similar in Australia.

I think you should put on some dark glasses and go to the government offices to pick up some pamphlets.

Best wishes,
~Wendy

[Coopco]

The minimum you need is a business name, an ABN, business bank account. In all matters financial, seek professional advice.
Make a business plan.
A starting point for reading is the link given by Jim, but also check asic.

Edited by Coopco, 21 January 2009, 11:39.

[cannuck1964]

Hi

Wendy wrote this:

Quote

The next step is to register a business name for the business, which of course alerts the "feds" that you should be collecting tax if you are over that $30,000 mark.

In fact if you register for GST collection as a business, it does not matter if you are over or under the 30K mark, you must collect the GST from all sales within Canada. This means any business can opt to collect the GST and subsequently offset the business related paid GST with what they collect.

This 30K mark, is there so that ALL businesses, regardless if they are sole proprietorship or not must collect the GST if they go over this amount in any fiscal year. As a sole proprietorship, you have the option to collect or not under the 30K sales level, once sales reach this level you must collect it, and the issue is if in the given year your sales exceed 30K do you have to then pay on all sales or just the amount over 30 k? I would imagine though the tax people will want it all regardless if you forecasted a boom year in sales.


cheers,
Peter