It’s important you decide on your business structure before you commence trading. These are the most common legal structures used by Australian businesses.
Sole Trader
A person trading as the individual legally responsible for all aspects of the business.
- Simple to setup and operate
- Full control of your business decisions and assets
- Unlimited liability
Partnership
A business structure that involves a number of people who carry on business together.
- Easy and inexpensive to setup
- You have shared control and management of the business
- It’s not a separate entity
Company
A company is a separate legal entity. The company’s owners can limit their personal liability and are generally not liable for company debts.
- A separate legal entity
- Limited liability
- Complex to start and run
Trust
A trust is an obligation imposed on a person – a trustee – to hold property or assets for the benefit of others.
- Expensive to set up and operate
- Require a formal trust deed
- Yearly administrative tasks required