Answer:
1. When changing your business structure you have to first cancel your ABN and apply for a new one. You need to register changes to the name, address and activity of the business, names of associates and trustees, bank account details etc. This can be done through the Australian Taxation Office (ATO) and Australian Business Registry (ABR) websites.
2. As a sole trader you are the head decision maker and investor for your business, but once you change to a company structure, you will need to appoint a board of directors to make decisions for the company, as well as consider taking on shareholders (outside parties who invest in the company, in the interests of raising capital).
3. You may or may not have any significant assets attached to your sole trader business, but if you do then you will want to transfer these assets with as little tax burden as possible – you’ll need a business lawyer or accountant to advise you on the best way to do this.
4. New terms and conditions that reflect your business as now operating through a company.
5. New employment contracts for any existing employees, and of course for new employees that you bring on.
6. Your tax obligations will change, and you will need to pay registration and annual review fees to ASIC. It will be best for you to consult with a tax lawyer or accountant to make sure you don’t miss anything with regards to your more complex legal and tax obligations now that your business is a company.
For a more comprehensive outline of changes that will occur visit Lachlan’s article for how to change your business from sole trader to company.
