Home – New Forums Starting your journey Planning an online business as a sole trader, can I get some advice please?

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  • #978802
    Nathan Williams
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    Hi all,

    It has been a while since I was last here, and life has until now gotten in the way of my plans.

    I am planning on starting an online business selling hobby electronics kits and supplies.
    I have worked out my finances, but I just need some guidance / reassurance that I am on the right path in terms of paperwork / registration etc.

    It is just me, and I am only selling over the internet.
    For the business structure I am planning on running the business as a sole trader.

    I know I need to get an ABN (even though I don’t expect to make enough to register for GST for a while).
    I also need to register a business name, as I won’t be simply using my name.

    Do I need to do anything to register as a sole trader, or is the ABN & business name enough?
    Do I just handle taxes as a personal tax return, counting it as income?

    What about importing?
    I will be buying supplies from both China & the US, but I don’t expect any single shipment to come close to $1000 yet, but if I make many small purchases over time, at some point does it start to count anyway (in terms of paying GST or import duties)?

    What about selling internationally?
    I live in NSW, but I plan to sell around the country and around the world, do I have to worry about anything beyond just posting out the product? (customs forms, taxes etc?)

    Is there anything I am missing?
    I will be starting this journey in March if that matters to anything.

    Thanks :)

    #1109629
    JacquiPryor
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    Hi There,

    I can’t answer your questions about importing – but, here’s what I can tell you:

    Do I need to do anything to register as a sole trader, or is the ABN & business name enough?

    Correct – keep an eye on your income though in case you do need to register for GST at some stage. I would also suggest you look into insurances. Also note that since May this year, we have a new national business name registration in place – via http://www.asic.gov.au, so that’s where you would now register your new name.

    Do I just handle taxes as a personal tax return, counting it as income?

    Yep. Once you have your ABN you will also be able to then claim business expenses as tax deductions on your personal return.

    What about selling internationally?
    I live in NSW, but I plan to sell around the country and around the world, do I have to worry about anything beyond just posting out the product? (customs forms, taxes etc?)

    With the new business name system you can trade all over Australia, as its a national registration. Note that a business name doesn’t protect a name or even guarantee you the right to use that name. It’s always wise to have a trademark search done on your proposed name to ensure you won’t be infringing any registered rights. (See my signature links). The same applies outside of Australia – if you intend to actively use/promote your name in a particular country, searches should be carried out to ensure that you are not stepping on any toes there either. Generally speaking, if you will target Australian customers, but may get the odd sale to someone overseas you should be fine – but if you target certain countries their laws will require consideration too.

    Hope that helps. All the best with it :)

    #1109630
    Divert To Mobile
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    Nathan Williams, post: 121999 wrote:
    Hi all,

    It has been a while since I was last here, and life has until now gotten in the way of my plans.

    I am planning on starting an online business selling hobby electronics kits and supplies.
    I have worked out my finances, but I just need some guidance / reassurance that I am on the right path in terms of paperwork / registration etc.

    It is just me, and I am only selling over the internet.
    For the business structure I am planning on running the business as a sole trader.

    I know I need to get an ABN (even though I don’t expect to make enough to register for GST for a while).
    I also need to register a business name, as I won’t be simply using my name.

    Do I need to do anything to register as a sole trader, or is the ABN & business name enough?
    Do I just handle taxes as a personal tax return, counting it as income?

    What about importing?
    I will be buying supplies from both China & the US, but I don’t expect any single shipment to come close to $1000 yet, but if I make many small purchases over time, at some point does it start to count anyway (in terms of paying GST or import duties)?

    What about selling internationally?
    I live in NSW, but I plan to sell around the country and around the world, do I have to worry about anything beyond just posting out the product? (customs forms, taxes etc?)

    Is there anything I am missing?
    I will be starting this journey in March if that matters to anything.

    Thanks :)

    lots of questions..
    1. ABN and GST are two separate issues. you dont HAVE to register for gst unless your business income exceeds 75k ? not sure but it was 50K when I registered.

    2. business name is enough and you can get away with a standard tax return. You might consider some insurance.

    3. you have to pay gst on what you pay for from australian companies. what i mean by that is if you use tnt australia for your freight you will pay them gst but it wont be included in your 1k customs limit. If you pay the supplier the frieht it does but you dont pay gst. when you begin formal customs declarations you will then begin to pay import duties. usually 5% – good idea to check if there is an excemption already in place for your category.

    4. when you export it is gst exempt so you do not include gst. – but if your not gst registered you should not be adding it anyway. You can also claim back the duties paid on the goods imported if you export them. You will have to sign declarations on goods exported. The country and carrier both want to know what your sending.

    yes march means you have loads of time to get all your information sorted.
    good luck and have fun.

    Steve

    #1109631
    Nathan Williams
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    Wow, thank you both so much!
    I have been tossing and turning over this, worried I must have been missing something (I have spent the last few days on the various government sites, going in circles!).

    You both mentioned insurance, what type of insurance are you thinking of?

    The business will be me working from home, packaging up components to make kits, and posting them out (at a high level at least).

    Do I need anything on top of standard home & contents, are some things treated separately due to being used for a business? (equipment, home office etc).

    Or is the insurance for if a customer has a problem with the product or something?

    #1109632
    Divert To Mobile
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    i was thinking product liability.
    But definitely call an insurace broker and have a chat with them.

    Steve

    #1109633
    JacquiPryor
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    I was also thinking Product liability.. even if you don’t manufacture the product yourself I believe you can still be held liable for selling a product in Australia if it has any defects/problems etc… you mentioned not having been on here for a while – well, there’s now an “Insurance” forum in the main Forum list… am sure someone on there can answer your more specific questions.

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