A sole trader is the most simple of the three options. Basically it's you working alone and is the easiest way to start operating. You don't even need to register a business name, though you can, and the taxation requirements are basically the same as if you were a PAYE employee, except that you remit direct to the taxation department rather than have the employer do it for you.

You are able to claim any legitimate business expenses; advertising, travel, motor vehicle, consumables, rent, etc.

You have full control over the running of your business, you take all of the profilts, and you are not liable for any debt incurred by any associate, only the debts incurred by yourself in running the business.

Things you will need if operating as a Sole Trader

You will need to have an ABN number (Australian Business Number) and you will use this in many of your business transactions. You generally quote an ABN on your invoices or other documents relating to sales that you make to other enterprises to avoid having them withhold 48.5% of the value of the invoice from the payments to you. Other businesses need the ABN for purposes of obtaining a GST input credit. You also use your ABN in certain dealings with the Tax Office. If you’re registered for GST, you also need to put an ABN on your tax invoices. You will also need an ABN if you wish to get credit card facilities on and/or register a business bank account.

You can apply for your ABN online.

http://www.abr.business.gov.au/(41elq1uk3zan0p55iyjjsx45)/content.aspx?page=abnapplication

Note that when you apply for an ABN number as an individual your name is shown when any person conducts a search on that ABN number. There is a way to get around this however. If you have privacy concerns you can contact your nearest Australian Taxation Office (ATO) for advice. You can also obtain further information from the Privacy Commissioner's web site, www.privacy.gov.au, or through direct contact.

As a sex worker you certainly have reason to apply. All a client needs to do is search your ABN and he can find our your real name, where you live, personal phone number, who your parents are, where they live, their personal numbers, where your straight job is... EVERYTHING! I have in fact been stalked this way and nearly lost EVERYTHING including my family. It is worth taking the time to apply to have personal information with held.

To avoid this happening you would need to establish a company and use the company name when applying for the ABN.

When paying your tax you will still use your individual Tax File Number. If you don't have a Tax File Number you can obtain one here:

http://www.abr.business.gov.au/(41elq1uk3zan0p55iyjjsx45)/content.aspx?page=tfnapplication

Partnership

This is where two or more persons join together to own and operate the business. In your case your partner might be another escort, or might be your spouse or the equivalent.

Partnerships are a common type of business structure and whilst they have their advantages, they also have some significant disadvantages.

Positives of having a partnership include:

they are easy to establish and cheap to set up. But you must ensure that a properly written partnership agreement is in place right at the outset, and get legal advice when preparing this document.
abilty to split your income with your partner, a definite plus if your partnership reflects your domestic relationship and your partner is earning considerably less than yourself. (However, bear in mind that the tax department could ask that your partner's contribution to your business be explained and his/her share of the income justified.)

Negatives of a partnership include:

each partner is personally responsible for any business related debts incurred by the other partner. So you need to be very sure that your business partner is someone you can trust completely. It is also likely you will have equal rights when it comes to writing cheques etc, so again you need to be confident that you can completely trust the other party.
you generally need to consult with your partner before any significant business related decisions are taken. This means if there is a difference of opinion, then you have to work out a compromise which might not be to your liking.

Things to consider if you enter into a partnership:

The partnership must apply for an ABN number and that number must be used for all of the partnership's business dealings (see link above to apply)
The partnership needs its own Tax File Number (see link above to apply)
Note that the partnership itself does not pay tax even though it must lodge a partnership tax return. The individual partners include any profit or loss from the business in their individual tax return and are taxed on that amount.

So operationally the partnership is quite similar to the sole trader except you carry the consequences and responsibilites of this business with another person/s.

Company

This is the most complex and legally "involved" of the three business structures. It does provide you with a greater degree of anonymity for you can be "such and such" Pty Ltd with a registered address at your accountant's office, for example.

You can purchase an "off the shelf" company for around $1,000, closer to $1,500 if you get your accountant to do all the paperwork associated with it.

The following is a link to a company which provides "shelf" companies and is one of the best resources we have found in this area.

http://www.incorporator.com.au

For the Pros and Cons of registering as a Company, please see this link:

http://www.incorporator.com.au/pros-cons-company.asp

What you will need to do if setting up as a registered company:

The company will need to obtain a ABN.
The company will need to obtain its own Tax File Number.
The company will have to pay income tax on its profits (30%), and you will have to pay tax at the normal rate for any salary and commissions and profit share you have taken from the company.

If you research setting up a company thoroughly, you will realise that to incorporate you must seek the advice of an accountant. This is not a DIY-type operation.

Your Business Name

Virtually all businesses have a registered trading name. It is easy to register a business name and the cost is not great, around $100 for a two or three years period.

To check out whether the name you would like to use is available go to the following site and conduct your own search.

http://www.search.asic.gov.au/gns001.html

What's in a name?

If you are planning to register a business name you normally have to state the nature of the business. For some of you this will present no problem, for others it might.

When chosing a business name, you can of course choose to register your working name or a name that is escort specific, or you can choose something a little more ambiguous/discreet.

Specific business names:

Cynthia Divine

Sublime Escorts

Non-specific business names:

Sydney Business Supplies

Sydney Entertainment Services

The question of what job you do

This can come up in a business context. Some examples workers have used include:

caterer
model
personal trainer
cleaner
image consultant
party planner
personal care assistant
ESL tutor

This is important when registering because the Tax Man wants to know what you do and when your register a business name, you are not permitted to register as a caterer if you are not a caterer. This means calling yourself Divine Cleaning is not ok if you are not a cleaner. You must also think of an ambiguous business name so it does not flag on credit card receipts and bank account transfers if you decide to take your fees via direct transfers or via merchant facilities. No-one wants their partner to see Lucy Blake Prostitute Extraordinaire on a credit card statement!

A note on GST

You must register for GST if your annual turnover (that is, total revenue earned) is $50,000. This means that if your turnover was to be lower than that you would not have to pay GST, but on the flip side you would not be able to claim any GST input credits on the GST you would have paid on supplies etc used in the course of your business.

For those of you who might be interested in how the tax department believes the sex industry should handle the question of GST in brothels and in escort work, check out the following.

http://www.ato.gov.au/businesses/content.asp?doc=/content/18507.htm

Conclusion

I think you will find it's not too hard to decide on the business structure that best suits your needs in the short to medium term. The steps you need to take are reasonably straightforward but you are advised to seek professional assistance.

Basically, keep it as simple as possible. You can always move up the scale of complexity if the needs arises.

MOST IMPORTANT LINK AND INFORMATION CAN BE OBTAINED ON THE DEPARTMENT OF FAIR TRADING's SITE here:

http://www.fairtrading.nsw.gov.au/Businesses.html

written by Willieone and Sydney Escort Lucy Blake; site design and maintenance by Lucy Blake; Copyright Lucy Blake www.lucy-blake.com 2009 - 2011

Elite Sydney Escort Lucy Blake, independent Sydney escort, Sydney escort companion for discerning gentlemen.

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