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Running Multiple Businesses Under One Company- Possible or Not?

If you are wondering whether you can trade multiple businesses under one company name, we are here to guide you through. The answer is yes, you can trade under multiple business names and in multiple ways.

Overview of Corporate Personality

Do you know what corporate personality is? It refers to a company that is considered legally separate from its owners and directors. Similar to a sole trader, a registered corporate personality company can:

  • Incur Debts
  • Buy & Sell A Property
  • Sue Others & Get Sued
  • Be Criminally Liable
  • Liable In Civil Matters

Under the ABN registration, companies can now register for multiple business names quite similar to a sole trader.

Advantages Of Registering Under Multiple Business Names

  • Registering multiple names saves you with fees from setting up multiple companies
  • Running multiple businesses under a company can limit your personal liability
  • Managing multiple companies under one larger structure is comparatively easy
  • Your company’s registered name will remain the same
  • Your company’s ACN and ABN will remain the same

Disadvantages Of Registering Under Multiple Business Names

  • Liabilities of one business name may extend to another
  • Confusion between business names operating under a company
  • Tax implications may be less favorable
  • A company may have to lodge multiple tax returns
  • A company may have to register multiple trademarks

Tax Considerations For Running Multiple Businesses

When it comes to multiple businesses running under one parent company compared to a sole trader, tax laws apply quite differently in both cases. The tax consideration guidelines listed by the Australian Government Business website states that:

  • Companies do not enjoy tax free thresholds
  • The income rate is different for companies
  • Companies are taxed separately, not under income tax
  • Small business concessions don’t apply to companies
  • Companies may have to pay other taxes

Though it is possible to run multiple businesses under one company, it comes with its own constraints. If you are not sure what will work the best for your business, talk to our business and tax consultants at KPG Taxation. We are skilled and experienced enough to provide worthy advice.