Doctors have several choices when it comes to setting up a business: you can register as a Sole Trader, a Company or a Partnership, or a Company Trust structure. Understanding the sort of company you are looking to build goes a long way in understanding what the right structure is for your set up.
The most common business structures include:
A Sole Trader model is the easiest to set up, however, it offers little protection from a business operational perspective.
If you decide to use a Company Structure, for example, ‘Your Name Pty Limited’, you will have more flexibility and protection from a business and tax perspective as it’s easier to:
- Bring in other business partners
- Set up and distribute shares easily
- Accelerate growth
Company and Trust Structure
Depending on your income and personal situation, a Company and Trust structure may be the best choice; offering you more income and business-level protection, as well as tax advantages. Discretionary Family Trusts are the most common small business structure in Australia and are a key strategy for many business owners wanting to legitimately minimize their tax positions and protect their wealth. However, setting up a Trust Structure can be complex and there are many regulations and compliance issues to consider.
Seeking professional advice is your best course of action, whichever business structure you choose. As a clinician or as a director, your responsibilities remain to provide quality patient care.
Once you’ve decided your business structure, the next step is selecting the name that your practice will trade under. Be selective in the name you choose as it will represent and inform the branding of your clinic. Ensure to check its availability through the Australian Securities & Investments Commission’s1 website. If the name doesn’t appear in the search, it’s available for you to purchase for either an annual or three-year fee.