Hello there. My friend and I would like to setup a design service business and need to know the difference between a partnership and a company? If it’s a partnership can we use a domain with .com.au or is that solely for a company? What is cost difference between setting up a partnership and company.
Without answering the domain question, the differences between partnership and company are very important to understand, or at least appreciate.
Number one point to consider is the asset protection issue.
To get the right advice you need to sit with a business accountant (CPA or CA best bet) and run through the options available to you and get it right early.
Best of luck with the venture.
Partnership is definately cheaper to set up than a company
Also Partnership is generally simpler and easier and cheaper to administer year in year out
In a partnerhip you are 100% responsible for everything that happens in the partnership. Its called JOINT AND SEVERABLE LIABILITY.
If your partner enters into a contract to buy the Sydney Opera House, you are stuck with it. If your partner runs up a heap of debt with someone and skips town.....you are stuck with it....not half of it. ALL of it!!
And ALL your personal assets are up for grabs...including the family home.
SO my advice to people is be very very careful who you form a partnership with. Because its something that can bite you in the backside....
EG.....if you form a partnership with a person, and that person dies suddenly, then the assets of that person (including the partnership share) goes to a spouse or a child or a parent or somebody that you may not want to be in business with.....I have seen exactly this situation, where a family were forced to sell a property that had been held by the family for 4 generations......
A company provides you with a LOT more security around your personal assets. Its not 100% but as long as you are sensible with business decisions you are for the most part isolated from business risk.
Get in front of a CPA or CA and get advice about what you are looking to do. It might cost you a bit to start with, but this will be chicken feed compared to potentially losing your house!!!!