When starting in business choosing the right structure is important as this will affect your ability to minimise your tax, secure your assets and your overheads in relation to your accounting.

Having the wrong structure in place can mean you are paying tax on your business income at your current individual rates as opposed to streaming your income through multiple family members and taking advantage of all of their tax free thresholds.

It can also mean all of your combined family assets are on the line in a worst case scenario compared to only the assets in the name of the director (which will have been minimised using other structures such as trusts etc).

Having structures that take all of the above in to consideration however may be overkill if you don’t have anybody else to filter income through to, you aren’t able to meet the ATO’s PSI rules or there is no one else to be the asset holder, in which case you are paying for additional preparation of financials and tax returns for little to no additional benefit. Michael, an Accountant at the Inspire comments below on things to take into consideration.

Structuring isn’t a one size fits all approach so it’s important to take a number of things into consideration such as how you will utilise the structures to maximise their benefits and how big you intend the business to grow. - Michael King

By leaving structuring too late you will run into a number of issues, including having to retrain all of your client base to change their payment habits when you open new accounts in the new entities, having to open new supplier accounts, all the way through to potential capital gains issues that can have massive tax implications.

It is highly advisable that anyone looking to step into business for the first time should have a conversation regarding their structuring to make sure they are starting off on the right foot from the beginning.

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