LAW REPORT
From 1 July 2021 , the rate is 25 %. This means that no matter how much assessable income you have earned the tax rate is flat rather than increasing as you earn more .
The company must also pay superannuation guarantee contributions for all eligible workers . Since 1 July 2021 , the rate is 10 %. This would include you if you are a director of the company .
Company directors
Under the Corporations Act , there must be at least one director . Each director must act with due diligence and good faith and show care and skill . For small companies , that director is likely to be you . Because the company is separate to you , the company will hire you and treat you as its employee . This means you will be paid a wage , be entitled to superannuation and treat the income you earn as personal income , separate to the company ’ s income on which it pays company tax ( see above ).
There must also be a secretary appointed by the directors . The secretary is responsible for establishing and maintaining the registered office , preparing and lodging annual tax returns and end of year accounts . The secretary must also act with due diligence and good faith and show care and skill . The secretary can be your accountant or tax agent .
Company directors have many obligations under the Corporations Act .
Some of the main obligations are to :
• place the company ’ s interests above their own ;
• act honestly and in the best interests of the company ;
• act with care and attention to detail ;
• be up to date with the company ’ s activities ;
• seek professional advice when needed ;
• take an active part in directors ’ meetings ;
• not use privileged company information for their own purposes or against the best interests of the company ;
• ensure that the company keeps financial records that comply with the Act ;
• ensure that the health and safety of all employees are provided for ;
• not allow the company to continue to trade if it can ’ t meet its current debts .
Advantages of being a company
• A company is a separate legal entity , so non-business assets are protected . This means that your personal assets , such as your house and car , cannot be sold to pay off business debts ;
• A company is capable of suing and of being sued separately to the individuals . Again , this means your personal assets can ’ t be used to pay off business lawsuits ;
• The tax rate for companies is 30 % or 25 % and flat so that it doesn ’ t increase as your profits do ;
• Staff benefit from the company ’ s compulsory superannuation payments .
Disadvantages
• Companies are more expensive to set up and maintain ;
• There are many more regulatory and reporting requirements . As a Director or Secretary , you will be held responsible for this ;
• Directors can be held personally liable for company decisions , particularly if they involve breaches of work health and safety ;
• Directors have less flexibility in running the business and making decisions .
For more information please see https :// www . business . gov . au / planning / business-structuresand-types / business-structures / change-your-sole-trader-businessto-a-company
Do you sell therapeutic goods on your website ?
Robert Medhurst
What ’ s a therapeutic good ?
Basically , it ’ s anything that has the intended purpose of having a health impact or diagnosing illness , where the product is offered for sale with implied or explicit therapeutic or diagnostic indications . It may be dried herbs , flower essences , probiotics or pretty much anything that could have an impact on somebody ’ s health or is used to diagnose illness . If you are offering such items for sale to the public and they are not prescribed to a client as a result of a bona fide consultation , in almost all cases , these items need to be either listed or registered with the Therapeutic Goods Administration ( TGA ) before being advertised .
If you offer these items for sale without first listing or registering them , and they are not some of the very few items that are exempt from these requirements , you are in breach of the Therapeutic Goods Act and probably the Therapeutic Goods Advertising Code . If you are found to have been doing this , the penalties can be quite severe . If you would like to avoid the unwanted attention of the TGA and you are offering products for sale to the public , we suggest that you either cease doing so or list or register the products with the TGA . For more on this see https :// www . tga . gov . au / advertisinggetting-started and https :// www . tga . gov . au / publication / australian-regulatory-guidelineslisted-medicines-and-registeredcomplementary-medicines
As a reminder , if you ’ re an accredited professional member , you are required to comply with the ATMS Code of Conduct , in this case , particularly section 6.4 : “ Members must not advertise , by any means , products or devices that do not comply with applicable legislation .”
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