| Legal Entities and Copyright |
| Invention Development Advice - Business Structure | |||
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The two legal entities most commonly encountered in business are: a person (a Sole Trader) or a Proprietary Limited Company. As a Sole Trader: You can trade under your own name right now, or you can register a business name that is different from your own name. This is inexpensive but you will need to renew it at regular intervals. There is no differentiation between you as an individual and your Sole Tradership. You are personally liable. If someone sues your Sole Tradership, the courts can and will come after your personal property. All the income your Sole Tradership earns is counted as your personal taxable income. You take money out of the account as you need it. As a Proprietary Limited Company: You must register a unique name with ASIC. You will need to submit annual returns to ASIC and formally report all operational changes. You are also required to have workers compensation insurance. Compared to a Sole Tradership, there is more paperwork and the fees are much higher. A company is a distinct legal entity separate from the people working in it. Directors are appointed to take care of its interests. A company offers liability protection. If someone sues a company, the courts cannot come after the personal property of its employees. A company must submit its own tax return. Companies are taxed at different thresholds than individuals. This provides opportunities for improving tax effectiveness. You cannot simply take money out of your company’s bank account. You receive money as salary (with super) or loan repayments. Copyright is automatically assigned to the creator of a piece of work as soon as it is created. There is no official paperwork to do. The creator can sell or give the copyright of the work to another entity – a person or a company. Alternatively, the creator can license another entity to use the work whilst retaining copyright ownership. The creator of a piece of work can continue to be recognised as such even if the copyright is owned by another entity. The simplest way to avoid copyright infringement is to ask permission (and pay a fee) to use everything that is not directly created by you. If someone steals your work, your only recourse may be to take them to court. See http://www.asic.gov.au/ and http://www.copyright.org.au/ Disclaimer: this paper is not proper legal advice. You must check all facts with your accountant or lawyer. By Zern Liew To find out how Zern can help you communicate or work better, visit http://eicolab.com.au/services/ and http://eidesign.com.au/services/ For more tips, tools and innovation thought-provokers, visit http://eicolab.com.au/blog/
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