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Starting your own small business
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VK3DRB:
I had a Pty Ltd for an electronics business about eight years. The added paperwork is a pain in the arse as is the extra govt fees, but it can be tax advantageous if you earn >= $117K per annum, but not if you earn <$117k per annum. $117K is the magic number at time of writing. I run a electronics business just as a business name and am making more than that, so in retrospect a Pty Ltd would have been better. The way things are going, I might have to turn it into a Pty Ltd. I have had to reject work because I am so busy - for the next few months at least.

In a small business you have to do the books. For a small business, I highly recommend Wave Accounting. It is free and works a treat. After trying Quickbooks and another paid-for accounting package, I was delighted with Wave Accounting. Easy to set up GST etc. Wave Accounting is a medium sized company with in Canada. They make it free so you can optionally put credit card payments through them for a small but competitive fee. But I suggest if you are not that good with finances, you get a bookkeeper to help set it up a chart of accounts for you.

A Pty Ltd offers you no legal protection. If you get sued you can lose your house whether you have a Pty Ltd or not. Henceforth professional liability insurance is a must in any case. If your business is electronics engineering, the premiums are higher than for a programmer because the word "engineer" is used. After shopping around, I found one insurance broker who was quite a bit cheaper than anyone else, underwritten by Lloyds of London.

If you have a Pty Ltd and the government swipes your money from your bank in the event it becomes dormant or you de-register the business, it is hell to get it back. ASIC can force you to re-register the business at your cost just so they can get your money back; and they make you make you go through a mass of the paperwork more than once, at your cost. ASIC is an incompetent bureaucracy. In my case, they leaked my and the other company owner's confidential financial details to an unknown person overseas because they typed in the wrong email address. If the account is just in a business name, you can get your money back more easily if ASIC swipes your money, but your financial details will not be secure as I can testify.

I spent 18 years in corporate life as an employee working for IBM with 350,000 employees, followed by 20 years working for medium and small companies. I am happier working for myself, making a lot more per hour than I ever did as a professional engineer. I do get some social interaction with my clients. Some people feel isolated working for themselves, but I don't have that problem. I have two offices - one with a shared receptionist and one with a lab where I do the electronics design. In the lab I listen to TSF Jazz online or Oak FM. Nothing better. I NEVER want to work for a large corporation again.   

When working in my own business I feel much more accountable than as an employee. I sometimes think about work long into the night and on the weekends. Not so bad because I enjoy what I do. Where if you are a cog in the wheel in a large organisation, your manager has to worry about stuff.

It is definitely a game changer working for yourself. It has its pros and cons. The biggest hindrance to starting a small business is fear of the unknown. Well who'd have thought (besides Bill Gates) this virus was going to hit us. Even as an employee, there is no guarantee of employment. The world is very different to what it was 30 years ago.
EEVblog:

--- Quote from: vk6zgo on May 31, 2020, 05:37:49 am ---I, too, wonder what happened with  Halcyon's business.
I was going to put my 2c in that local Councils like to have their say about what kind of business you are running from home, too.

--- End quote ---

Unless it's business that attracts the public, or has massive signage, or medical or some such, or otherwise disturbs the neighbors, they don't care.
There are specific guidelines for this.


--- Quote ---I was looking at running an Electronics repair business from home, & looked up the Council guidelines.
They had never heard of Electronics, but Computer repair was OK. :palm:
--- End quote ---

Try getting business insurance for being a Youtuber...
Officially I'm a "DESIGN ENGINEERING CONSULTANCY"
EEVblog:

--- Quote from: VK3DRB on May 31, 2020, 11:50:05 am ---A Pty Ltd offers you no legal protection. If you get sued you can lose your house whether you have a Pty Ltd or not.

--- End quote ---

Err, it's not that simple.
A Pty Ltd offers financial protection from the business going backrupt etc. If the company goes bust then the creditors cannot touch the directors personal assets.
What you are thinking of involves personal liability, i.e. you personally did something that caused someone harm and they sue you directly, not the company.
Generally they will sue whoever has insurance, if your business has insurance then they sue the business. That's what insurance is for.
It is harder to sue a director personally if you dealt with the business, especially if best practices were used.
VK3DRB:

--- Quote from: EEVblog on June 01, 2020, 06:23:07 am ---
--- Quote from: VK3DRB on May 31, 2020, 11:50:05 am ---A Pty Ltd offers you no legal protection. If you get sued you can lose your house whether you have a Pty Ltd or not.

--- End quote ---

Err, it's not that simple.
A Pty Ltd offers financial protection from the business going backrupt etc. If the company goes bust then the creditors cannot touch the directors personal assets.
What you are thinking of involves personal liability, i.e. you personally did something that caused someone harm and they sue you directly, not the company.
Generally they will sue whoever has insurance, if your business has insurance then they sue the business. That's what insurance is for.
It is harder to sue a director personally if you dealt with the business, especially if best practices were used.

--- End quote ---

True. But if there is no insurance at all, you run at risk. A mate of mine in Melbourne who is a pretty good electronic engineer doing his own thing in a one-man Pty Ltd for 30 years has never had insurance. His attitude is if you show due diligence and are honest, no-one is going to come after you. Besides, this is not the United States.
EEVblog:

--- Quote from: VK3DRB on June 02, 2020, 12:14:44 pm ---
--- Quote from: EEVblog on June 01, 2020, 06:23:07 am ---
--- Quote from: VK3DRB on May 31, 2020, 11:50:05 am ---A Pty Ltd offers you no legal protection. If you get sued you can lose your house whether you have a Pty Ltd or not.

--- End quote ---

Err, it's not that simple.
A Pty Ltd offers financial protection from the business going backrupt etc. If the company goes bust then the creditors cannot touch the directors personal assets.
What you are thinking of involves personal liability, i.e. you personally did something that caused someone harm and they sue you directly, not the company.
Generally they will sue whoever has insurance, if your business has insurance then they sue the business. That's what insurance is for.
It is harder to sue a director personally if you dealt with the business, especially if best practices were used.

--- End quote ---

True. But if there is no insurance at all, you run at risk.
--- End quote ---

Of course, but it's far easier to sue an insurance company for a claim than it is to sue an individual and take their house.

Also, if you do something criminal or deliberately negligent, then no insurance is going to save you because you will be personally liable.
For instance, if you are an engineer at a company (or your own company) and you design something deliberately that you knew could kill someone and it does, you are personally liable and will face criminal charges. A company I worked for once had a criminal lawyer come in and explain this to everyone as a warning to always use "best practices".
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