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The different characteristics of a company compared to a small business, explained by our small business accountants in Melbourne

There are quite a few different characteristics that differentiate a company from a small business, with most of the characteristics being relevant to its actual structure. Our small business accountants in Melbourne identify that the main difference is that a company has a separate legal entity to its owners, which are called shareholders. Detailed below are the diverse characteristics of a company:

Separate legal entity
Our business accountants in Melbourne acknowledge that a company is formed under the Corporations Act 2001 and is registered with ASIC. ASIC issues each company an Australian Company Number.

Ability to raise capital
A great advantage for a company is that they have the ability to access capital through the sale of shares. However, the ability of companies to raise capital is limited in its effectiveness as potential lenders know that they will be unable to “raid” the personal assets of the owners.

Limited liability of owners
Shareholders in a company normally have no personal liability for the corporation’s obligations, beyond their investment in shares.

Transferability of ownership
Our Melbourne small business accountants also note that ownership for companies can be transferred easily through the sales of shares, especially shares in publicly listed companies.

For more information regarding the different characteristics of a company, please contact our small business accountants in Melbourne today.

 
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