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 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.
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 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.
High establishment costs
Complex legal and tax formalities
Additional tax return required for trust
Advantage of discretionary profit distribution
Tax is applied at marginal tax rates of beneficiaries
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 ongoing compliance costs
Additional tax return required for company
Annual asic compliance & costs
Tax is applied at the corporate tax rate 27.5%
Shareholders receive franked profit with pre-paid tax credits
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