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  • #979665
    Anonymous
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    Hi Everyone,

    I am ready to source products for my first e-commerce store and i was wondering is it best to set up a company if you want to build an e-commerce store and would you set it up straight away before you get the store online.

    I’m a carpenter and i have an ABN and registered for GST.

    Could i use this for my store or is it recommended i set up a company?

    Thank you,
    Nick

    #1116148
    TheGoldenGoose
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    Hi Nick

    How exciting!

    My hubby has similar skills, so crack the whip when he’s at home ;)

    These are questions you’d be better chatting with your accountant over. Will very much depend on how you want to shape the future of your business.

    Hope you get some more tips here, best of luck!

    #1116149
    Anonymous
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    Just to add to my previous post……

    If i decide to trade under my ABN would it be best to register a business name?

    Nick

    #1116150
    Anonymous
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    I just had a chat with my accountant and she says to use my ABN until the store picks up momentum and then once it’s turning a profit, change to a company.

    She said that there are high costs to set up a company and once the store is making enough profit i can change to a company structure.

    So i think ill work with my ABN for now.

    I also have a question about registering a business name…..

    I will be contacting suppliers to source products for my store soon and was wondering if suppliers ask me “what is my company” what should i say….

    “that i am not a company but a sloe trader”??

    Or should i register a business name so i can show that i have a business name at least??

    Nick

    #1116151
    JacquiPryor
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    Hi Nick,

    I am ready to source products for my first e-commerce store and i was wondering is it best to set up a company if you want to build an e-commerce store

    To be honest – whether your business type is an e-commerce store or something entirely different might not be the thing that determines whether a company is best or not.

    A company is a legal entity – where as a business name is not. So, there’s a little more protection (for you) by operating a company than simply acting as a sole trader with a business name. When you have a business name, as a sole trader, you remain the legal entity and the business name is kind of like an alias for you.

    As GoldenGoose suggested – an accountant really will be best to advise on the best structure for you/your circumstances.

    I’m a carpenter and i have an ABN and registered for GST. Could i use this for my store or is it recommended i set up a company?

    If you choose to continue as a sole trader, then yes you would use the ABN you already have. The ABN belongs to the entity – which in that case would be you, personally. Keep in mind if you continue your carpentry work as well as the store on the same ABN you’ll need to ensure you have good systems in place to track what each ‘business’ is doing, as all income/expenses will ultimately come back to the one ABN.

    If i decide to trade under my ABN would it be best to register a business name?

    If you call your business anything other than your own name you must register a business name. So, assuming your ecommerce store is going to have its own name it will require registration as a business name (and, the business name application will ask you for the ABN)

    In essence, you could register a company (e.g. Pty Ltd), which would then be able to obtain its own ABN, which would keep it separate to you/your carpentry work as it would be a separate entity – or, you can do them both on the one ABN but would definitely need to register the business name if trading by anything other than your own name.

    Again, whether a company structure is the ‘right’ structure for you is determined by many things, including personal circumstances so really is best to set up a consult with your accountant.

    All the best :)

    #1116152
    JacquiPryor
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    Woops – seems we crossed over on our posts there! Just keep in mind, continuing with your sole trader ABN now to ‘change’ later is actually not just swapping over, but setting up a company at that time – which will then obtain its own ABN so you’ll need to inform customers/suppliers of the changes etc at that time.

    I also have a question about registering a business name…..

    I will be contacting suppliers to source products for my store soon and was wondering if suppliers ask me “what is my company” what should i say….

    “that i am not a company but a sloe trader”??

    I think a lot of people use the word Company quite broadly and not always to specifically mean a registered Australian company. You could answer “Nick B Trading/As Business Name”.

    Or should i register a business name so i can show that i have a business name at least??

    As noted in my last post – yes, if you will be conducting business activities under any name other than your own personal name you must register the business name.

    #1116153
    Anonymous
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    Thank you so much for your detailed reply.

    It really is appreciated.

    Nick

    #1116154
    arty101
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    Hi there,
    I think don’t go for a company(pty ltd) yet as you would require more business directors etc..

    Whatver the name you like for your business, just to go fairtrading and have it registered as a trading name or business name. You already have ABN so there is nothing to any other work!
    You will probably pay $100 or something for few years.
    Thats it!

    #1116155
    Adam Stanecki
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    Hi Nick,

    Good luck.

    I’ve always started new ventures a a “hobby”.
    If they take off I then put the legal structure around them.

    If you focus on the structure first you might waste a lot of time and money that can be better spend getting the venture up and running.

    -Adam

    #1116156
    JacquiPryor
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    I think don’t go for a company(pty ltd) yet as you would require more business directors etc..

    You can have a company with just 1 director.. it’s not always best and you would need to ascertain this for your own situation, but, it is possible.

    Whatver the name you like for your business, just to go fairtrading and have it registered as a trading name or business name

    Just to confirm – since May 28 this year you no longer go to Fair Trading to register business names – all business names are through ASIC and are Australia-wide now. Cost is $30 per year or $70 for 3 years.

    I’ve always started new ventures a a “hobby”.

    This page at the ATO website can help you determine if you have a hobby or a business.

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