A sole trader is the simplest business structure for a single owner business.

It is an individual running the business

- you run and control the business solely

 

• Low initial start-up cost

• Simple registration costs

• Low ongoing compliance costs

• Single tax return required as supplementary item in personal return

• Tax on profit is applied at marginal tax rate of business owner

A trust is a complex business structure used for asset protection and tax planning purposes. It is generally used for family who carry on business together - trustees as guardians run and control the business jointly.

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• High establishment costs

• Complex legal and tax formalities

• Medium ongoing compliance costs

• Additional tax return required for trust

• Advantage of discretionary profit distribution

• Tax is applied at marginal tax rates of beneficiaries

A partnership is the simplest business structure for a multi owner business.

It is a group of people who carry on a business together - partners run and control the business jointly.

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• Low initial start-up cost

• Simple registration costs

• Medium ongoing compliance costs

• Additional tax return required for partnership

• Profit is evenly split between partners

• Tax is applied at marginal tax rates for each business partner

A company is run by its directors and owned by its shareholders.

It has individual(s) running the business who are accountable to the shareholders.

- you may run and control the business solely as director and shareholder.

 

• High establishment costs

• Complex legal and tax formalities

• High ongoing compliance costs

• Additional tax return required for company

• Annual ASIC compliance & costs

• Tax is applied at the corporate tax rate 26%

• Shareholders receive franked profit with pre-paid tax credits