A sole trader business structure where one individual is fully responsible for all business operations and liabilities.
A sole trader business structure is a person trading as the individual legally responsible for all aspects of the business.
- Simple and inexpensive to set up
- Full control of assets and decisions
- Low reporting requirements
- Unlimited personal liability
- Business losses may offset other income
- No separate business bank account required
- You are not considered an employee
- No payroll tax if no employees
- Can employ staff with legal obligations
- Easy to change business structure
- Cannot split profits with family
A business structure where two or more people jointly operate and share responsibilities and profits.
A partnership involves two or more people carrying on a business together.
- Easy and inexpensive to set up
- Requires separate TFN
- Partners share control and management
- Partners personally liable for debts
- Partners pay tax individually on profits
- Partnership tax return required
- Each partner manages own superannuation
- GST registration required if turnover exceeds $75,000
A separate legal entity where shareholders own the business and liability is limited.
A company is a separate legal entity that can sue and be sued and incur debt.
- Separate legal entity
- Limited liability
- Higher setup and running costs
- Registered with ASIC
- Directors control operations
- Shareholders own the company
- Company pays its own tax
- GST registration required above threshold
A structure where a trustee holds assets for beneficiaries, offering asset protection benefits.
A trust is an obligation where a trustee holds assets for beneficiaries.
- Can be expensive to set up
- Requires trust deed
- Formal annual administration required
- Trustee legally responsible
- Trustee can be a company
- Provides asset protection
- May provide tax planning benefits
