Wholesale & eBay Forum General Selling Advice & Tips Which is better: sole trader or registered company?

Which is better: sole trader or registered company?


lindaminotto1231
Full Member
  • Posts: 5
  • Joined: 15 May 17
  • Karma:
2 Jun 17 04:34:33 am
I have a company registration for a business that I used to own (which wasn't in eCommerce). I am now in the process of setting up a new business in eCommerce and I'm about to start looking for suppliers. I started to set up a business paypal account when the form requested if I was a sole trader or a company. I had never thought about being a sole trader, but I am starting to think that wouldn't be such a bad idea. I will be selling items on ebay using a drop shipping service and I would be doing this on my own (no employees). There are perks with being a company (e.g. portraying a professional image, separate entity etc), however under Australian tax law, I would pay $5,000 less tax per year (for the first $18,000 of income) if I am a sole trader. I don't have much experience with contacting suppliers yet. Would it look unprofessional for me to not state a business name when I contact suppliers? Would I look less trustworthy to suppliers?
Thanks in advance for any replies! I would very much appreciate it.
Cheers,
Linda


Linda Minotto BSc (hons), PhD
QualiVite
Linda.minotto@qualivite.com.au

fudjj
Site Admin
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  • Karma:
2 Jun 17 05:17:00 am
Hi Linda,

There is certainly nothing wrong with going with a Sole Trader option, that's the perfect low cost option for a self employed business owner in Australia. Of course that itself relates to registering a business name, so you would only not have a business name if you didn't register as a Sole Trader and therefore, you would just be considered a private trader.

Cheers


Mark (fudjj)

Community Manager
SaleHoo.com

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lindaminotto1231
Full Member
  • Posts: 5
  • Joined: 15 May 17
  • Karma:
2 Jun 17 11:23:32 am
Hi Mark (and to any members that may have a similar question).

Thanks so much for your reply. I'm glad it's unlikely that suppliers would avoid dealing me with me if I am a sole trader.
I have since called the Australian government authority (ASIC) regarding a transfer of my business name from my Pty Ltd company to a sole trader business and they said that I can also have the same business name for both of these entities. They said this would be considered/classified as a joint venture.

The above comments are based on my conversation with an ASIC representative. Anyone with a similar question should contact ASIC to check if this applies to their circumstances.


Linda Minotto BSc (hons), PhD
QualiVite
Linda.minotto@qualivite.com.au

fudjj
Site Admin
  • Posts: 6295
  • Joined: 27 Jul 07
  • Karma:
2 Jun 17 07:39:19 pm
That's quite interesting Linda, I had no idea you could register the same name with ASIC for a company and sole trader structure.

But in regards to suppliers, no issues at all either way. If you have a registered business, no matter what the legal construct, you will have a tax id and that id is what opens doors with every supplier.


Mark (fudjj)

Community Manager
SaleHoo.com

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