Reducing the risk of operating a business from home
There are many things to consider when setting up a business, not least of which is what is the best entity to use for owning the business. There can be benefits of operating a business as a sole trader when the owner is still working while the business builds to a point where the owner can operate it full-time.
Where losses are made in the set up and establishment period, as long as the prime reason for changing from one type of business entity to another is not to reduce income tax, there is no reason why a business cannot be first operated as a sole trader and then change to operating as a company. A major reason for changing from operating as a sole trader to a company can be where a business could be subject to being sued. This could be as a result of faulty products being sold, or as a result of a customer having an accident while visiting the business premises. Read more
Max Newnham - Brisbane Times - 31 July 2018