How you tell someone has a company in their structure, is the letters “Pty Ltd” at the end of the name. For instance, our own structure is Inspire Accountants Pty Ltd. So we've got a company within our own structure.
There are two tax rates. The first one is 30% and that was around for years and years but now it has changed over the last handful of years, where 30% is for non-businesses or investment companies (passive investments) The tax rate at the moment for small businesses under the threshold is 26% tax and if you compare it to the highest rate of an individual, it is a lot less.
If you earn $100K in profit in either of these structures, you can easily see that using a company would save 17% or more. It's a cool way to save a heap of tax just by using that different structure.We call this a small business concession or the small businesses concessional tax rate for the company.
GST can apply in any of these entities and in terms of tax planning for a company, we do get a lot more flexibility. A company like a Pty Ltd company is a separate legal entity, it has separate assets and is considered as separate for legal purposes then the director running the company. So, on a surface level, if your company gets sued, you do have a layer of protection between your personal assets and the company's assets.