To throw in my situation, I'm a Pty Ltd contractor/consultant.
It costs me $2,000 (although increasing now as I do more things) a year
to keep the company going, but the cleanliness of the seperation between
personal and company is something I find refreshing.
As I see it, there's a couple of clear situations.
If you think you will end up with a product of some sort in the process
of your contracting/consulting and you ever want to sell out, you need a
company, as early as possible (to keep intellectual property stuff clear).
If you think that you are going to end up hiring subcontractors or staff
(if you move more into the consulting/development direction that just
straight labour hire) you probably want a company too, just for the
accounting cleanliness.
Other than that, if the $2000 a year doesn't matter much, then you can
go either way. If $2000 a year matters a lot, then don't go for a company.
Either way, you can delay it if you want to and switch later, unless you
go the product/selling-the-business route.
Adam K
Rev Simon Rumble wrote:
Hi folks.
I'm about to start contracting and it seems it's a lot more efficient to
have things wrapped into a company. I've been looking around and seeing
stuff about the "80/20 rule" and the like, which determines whether you
can apply company tax instead of personal income tax, and other stuff.
So does anyone out there have any (IANAA) advice on such things? Any
recommendations of accountants to get advice from? Ideally accountants
who can deal with free-software ledger systems...
Oh and yes, those of you wondering, I'm back in Sydney.
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