Choosing the proper structure for your practice means smooth operations, but getting to that stage can be a long and confusing journey. You need to decide on a suitable model for your business and your needs but not everybody’s business will run the same. That is why there are five main medical business models in Australia. It’s time to ditch the template and work with a medical accountant to get the most out of your business model for your clients.
Medical practices need a good business structure to ensure the model benefits their clients, providing a sustainable and strong future for their business. For personalised advice or support, contact our team at Curve Accountants today!
Choosing The Right Structure For Your Business
When structuring your medical practice, there are many things to consider. Bring on a medical accountant to provide you with tailored advice on your circumstances. As your business evolves and grows, so will your structure. So don’t feel like what you choose is locked in forever; this is why it’s helpful to speak to an accountant for doctors to make this process simpler.
The medical market will often shift, so you need to have an accountant on your team to ensure you’re making educated and thoughtful decisions. When looking through the below models for your business, you should consider the following factors.
- Control over resources
- Liability limitations
- Tax thresholds and conditions
- Administration
- Complexity and cost of business et up
- Flexibility
- Asset risk and protection
- Regulations and compliances
The Main Five Models
When choosing a model for your medical business, it’s essential to factor in each style’s benefits and limitations. As you read through the models below, think about how your business and clients would fit into each.
1. Sole Trader (Individuals)
Sole Traders are independent individuals who work for themselves, choosing their hours, clients and workload. It is easier for an individual to administer and more cost-effective than other models. The downside to sole trading is that the individuals have total liability for any legal issues and are taxed at a higher rate.
2. Partnership (Group)
When you enter a partnership model, you work with one or more doctors to carry the business into a profitable margin. Similar to sole trading, it’s cost-effective to set up and maintain on the business and client fronts. The liability is shared between partners – meaning everyone is liable for each other’s actions.
3. Assistantship (Individuals within a Group)
An assistantship applies to those working within a group but does not own the business. These doctors are considered assistants to the owner doctors for their medical services and are classed as employees.
4. Company (Corporation)
Company models can choose to be public or private in their service offerings, have limited liability and have a fixed tax rate of 27.5%. However, it is more complex and costly to set up a company, having to adhere to the Corporations Act 2001.
5. Trust (Entity)
A trust allows businesses to run underneath its umbrella. A trust’s sole purpose is to organise and accumulate wealth for its benefactors. This is a more flexible option and allows for income distribution. Each benefactor has its own tax rate and income.
Have you settled on the model you want to move forward with? If you haven’t already, now is the time you should talk to medical accounting experts to look over your structure and provide feedback that’s best for your circumstances.
How Curve Accountants Can Help You
Medical accountants aren’t the first service doctors think of when they struggle to choose their practice structure, but we are an essential tool on your side. With so many legal, economic and ethical factors to consider – having a fresh set of eyes with the financial expertise you need is exactly what you need.
Whether you are a dentist, GP, medical professional or an allied health practitioner, if you’re looking to start a business – contact us to see how we can help. If you want to learn more about how Curve Accounting can help your medical practice, read about our medical accounting services or get a free business consultation.
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