Business Name or Company: Which Is Right for You?

Why the choice matters

When you start a business, one of the first decisions is how to set it up. The two most common routes are registering a business name or incorporating a company. They look similar from the outside, but they work differently.

A registered business name

A business name is typically used by an individual or by partners who want to trade under a particular name. It is generally simpler to set up and suits small, owner-run businesses.

The business is usually not treated as legally separate from its owner, which can matter when it comes to responsibility for debts and obligations.

A company

A company is a separate legal entity. It has directors who manage it and shareholders who own it. It is often chosen by businesses that plan to grow, take on investors, sign larger contracts or limit the owner's personal exposure.

Companies are generally expected to keep their records up to date with the Corporate Affairs Commission, including filing annual returns.

Questions to ask yourself

• Will I be the only owner, or will partners and investors be involved?
• How large do I expect the business to become?
• Will clients or lenders expect me to have a company?
• How much ongoing administration am I ready to manage?

Next step

The right choice depends on your plans and circumstances. This article is general information and not advice on your individual matter. If you would like to talk it through, contact us and we will explain the options for your situation.