Become a Virtual Assistant in Australia
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business structures

I decided to write this article about business structures for virtual assistants because there isn’t much available for virtual assistants that isn’t in “Government speak” and if you are like me, you find it hard to translate from “Government speak” to your own language at times.

First of all, there are many issues to consider when deciding on a business structure, especially for the long term health of your business.  For Virtual Assistants, the structure you choose will impact on:

  • your tax liability
  • whether you’re considered an employee, and independent contractor or the owner of the business
  • your potential personal risk
  • how much control you have over the business
  • ongoing costs and time involved in meeting your legal requirements.

I therefore highly recommend that you speak to an Accountant or Lawyer who is familiar with home based business structures.

The following websites are also helpful:

  1. The ATO Website
  2. SecurePay – Brief Article
  3. Government Business Website Article on Home-Based Business

The Typical Situation for Most Virtual Assistants.

Virtual assistants who consider themselves to have little assets or potential risk in working with clients will start off their business as a sole trader.  While this is the cheapest option initially there are some drawbacks in that you use you own personal tax file number and the business income is considered to be your own personal income.  The ATO advises:

“As a sole trader, you pay the same tax as individual taxpayers, at personal income tax rates. Individuals who are Australian residents don’t pay tax on the first $18,200 they earn. This is called the tax-free threshold.” ATO

The business isn’t a separate entity and you can be open to risk if an unhappy client or supplier decided that your action was in some way detrimental to them.  You can take out insurance to cover this.

In my opinion, if you are not sure whether being a virtual assistant is something that you want to do long term, then you should consider setting up as a sole trader initially.  You can change the structure at any time.

Usually experienced virtual assistants who are earning more than $75,000 per year will consult with their Accountant or Lawyer to investigate the benefits of changing the structure to a Company or Trust.  Which on they choose depends on their own personal circumstances, what their long term plans are for the business and what their exit strategy will be.

Goods and Services Tax (GST)

You can register for GST at any stage but once your income exceeds $75,000 per annum you are required to register for GST.  This is a personal choice.  However, you should be aware of the extra admin and lodgment requirements.  This often motivates virtual assistants to wait to register for GST until they reach the threshold.

Operating Under an Existing ABN

Some virtual assistants either already have an ABN or their partner has an ABN and will start operating under the existing ABN rather than apply for a new one.  Before you do this just check that the ABN is still current as you may have to reinstate it.  Also if you want to operate under your partner’s ABN check with their accountant first to make sure you understand if there are any issues with this approach.

ASIC Connect 

This government website has been developed to help you manage and research business registrations.  You can look up business names to ensure that yours has not been already registered and complete the online registration process to register for your ABN.  (Some new virtual assistants have advised that they have experienced a glitch in the online form if you put a date in the future for starting your business, they report that it is better to apply when you have already started operating).

New VA Business Checklist

I have put this simple checklist together to help you set up and meet and your legal requirements.  If you find it useful, I would love you to share it on social media as a thank you 🙂

new va business checklist