Home – New Forums Other discussions Changing PTY LTD co. to sole trader

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  • #989028
    Bizinfopls
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    I’ve read the other link about changing from one Pty Ltd to a new company but my question is different:
    I have operated as a Pty Ltd company since inception 11 years ago. However, besides all the protocol and extra expense (fees, separate tax returns, etc) I haven’t seen any benefit in operating as this and am considering changing to operate as a sole trader – using the same business name. How do I go about changing? Do I need to let ASIC know – I’ve already paid my annual registration fee? And are there any pitfalls? Advice would be appreciated!

    #1170115
    Burgo
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    Bizinfopls, post: 197292 wrote:
    I’ve read the other link about changing from one Pty Ltd to a new company but my question is different:
    I have operated as a Pty Ltd company since inception 11 years ago. However, besides all the protocol and extra expense (fees, separate tax returns, etc) I haven’t seen any benefit in operating as this and am considering changing to operate as a sole trader – using the same business name. How do I go about changing? Do I need to let ASIC know – I’ve already paid my annual registration fee? And are there any pitfalls? Advice would be appreciated!

    When I did this I had a long talk with my trusty (not rusty) accountant, and he offered to do all the work.
    I think it was the best thing I ever did as far as my business was concerned.
    You will probable get a refund from ASIC.

    #1170116
    Bizinfopls
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    Burgo, post: 197294 wrote:
    When I did this I had a long talk with my trusty (not rusty) accountant, and he offered to do all the work.
    I think it was the best thing I ever did as far as my business was concerned.
    You will probable get a refund from ASIC.

    Thank you Burgo! Good to hear my instincts were correct.

    #1170117
    Anonymous
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    Hi Bizinfopls,

    It’s great to hear that Burgo was able to give you some info based on his own experience (thanks Burgo!), but please do also check with your accountant, who’ll be able to give you more specific advice based on your personal circumstances.

    Thanks for joining the forum too, by the way. Please make yourself at home – a good way to start is by heading over to the New members section of the forum and telling us a bit about yourself and your business.

    Nice to meet you,
    Jayne

    #1170118
    PRO
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    Do you have any liability issues or risk in your business?

    Another option may be to run as a trust with the company as trustee. If you have family that you can distribute income too then this may be a more tax effective structure.

    #1170119
    Bizinfopls
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    Thank you for your reply.
    No I don’t have any risk or liability issues. I want to try to keep it as simple as possible.

    #1170120
    Anonymous
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    HI

    I understand that you want to keep it as simple as possible, however, there are a number of things you should probably be aware of which is why you really should talk to an accountant about your specific situation.
    1. PSI could be a factor in your decision (without knowing what your business is it is not possible to make any further determination on this).
    2. Your level of income could be a factor, ie if as a Pty Ltd you are earning significant income, tax is locked at 30% whereas as a sole trader you will be subject to scaled income tax rates which could be much higher.
    Regards
    Kerry

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