Hi! Your situation is not an unusual one - choosing the right way to structure your business is among the most important a business owner makes. Using a company structure can be advantageous for a successful business, particularly for tax purposes. This is because the company tax rate in Australia is 30%. As a partner in a partnership, you are taxed as an individual at the highest marginal rate, which may be more than 30% depending on how much you earn. Therefore, structuring your business as a company can save you a substantial amount of money.
Aside from tax, partnerships can have other disadvantages compared to companies. Perhaps the major disadvantage is that, as a partner, you are personally jointly and severally liable with your other partners. This means that should the partnership fail, or one of the other partners incurs a personal debt, your personal assets can be accessed by creditors.
A company is different as it is a separate legal entity from the people who own it. This means that, as a director of and shareholder in a company, you will not be liable for the personal debts of the other shareholders or directors. Moreover, companies are generally “limited liability”, which means that, absent any misconduct or guarantees by directors or shareholders, creditors are only able to enforce debts against the assets of the company, plus any money unpaid on shares. As a business owner, this means that you can enter into contracts and borrow money without your personal assets being at risk.
So depending on your circumstances, it may be a good idea to change to a company structure instead. The best thing to do is to get legal advice - this would mean a lawyer would be able to look at your specific situation to help you figure out what would be best.