SOLE TRADER
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
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Low initial start-up cost
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Simple registration costs
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Low ongoing compliance costs
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Single tax return required as supplementary item in personal return
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Tax on profit is applied at marginal tax rate of business owner
TRUST
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
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Complex legal and tax formalities
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Medium ongoing compliance costs
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Additional tax return required for trust
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Advantage of discretionary profit distribution
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Tax is applied at marginal tax rates of beneficiaries
PARTNERSHIP
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
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Simple registration costs
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Medium ongoing compliance costs
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Additional tax return required for partnership
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Profit is evenly split between partners
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Tax is applied at marginal tax rates for each business partner
COMPANY
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.
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High establishment costs
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Complex legal and tax formalities
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High ongoing compliance costs
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Additional tax return required for company
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Annual ASIC compliance & costs
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Tax is applied at the corporate tax rate 26%
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Shareholders receive franked profit with pre-paid tax credits