Business Structures & Asset Protection | Sole Trader | Company

How To Choose The Right Business Structure?

Choosing the right business structure is important for tax planning, asset protection and compliance costs. The following considerations should guide your decision:

  • Complexity of your business
  • Client base
  • Exposure to personal assets
  • Future plans
  • Set up and compliance costs

The most commonly used business structures in Australia are Sole Trader, Company, Partnership and Trusts.

Here’s What You Need To Know:

Sole trader – this is the most simple business structure with minimal setup and maintenance but you will be personally liable for all business decisions.

Company – this will give you better asset protection and less personal liability but the setup and maintenance costs are higher.

Partnership – this is easily established with low costs and greater borrowing capacity but each individual is liable for the actions and debts of the partner.

Trust – this can give you flexibility and limited liability but the structure can be complex and expensive.

You may be able to use a combination of structures, for example a company with a trust as a shareholder, or a trust with a company as a corporate trustee.

Choosing a suitable business structure is essential for a start-up, but established businesses that have seen significant growth or have plans to scale their business may also benefit from a structure review.

Need advice on choosing the optimal business
structure for your needs?

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