SmallBusiness.wa.gov.au
The Small Business Specialists
Phone: 131 BIZ
Website: www.smallbusiness.wa.gov.au
This Business Brief information is also available as a PDF which has been formatted for downloading and printing.
Business Strutures (2-page 51 KB)When commencing a business, one of the most important decisions to be made is the choice of your business structure. It is suggested that you consult your accountant or other professional adviser before you decide.
The options are:
Your choice should take into account the following:
Comparison of sole trader, partnership, company and trust:
| Business Structures |
Sole trader
|
Partnership
|
Company
|
Trust
|
|---|---|---|---|---|
| Is the structure difficult to set up? |
No
|
No
|
Yes
|
Yes
|
| Is it expensive to register? |
No
|
No
|
Yes
|
Yes
|
| Do I retain complete control? |
Yes
|
No
|
No
|
No
|
| Are there complex reporting requirements? |
No
|
No
|
Yes
|
Yes
|
| Will my assets (house etc...) be under treat if my business goes into debt? |
Yes
|
Yes
|
Not as likely
|
Not as likely
|
| Do I receive full profits made from the business? |
Yes
|
No
|
No
|
No
|
| Can I employ staff? |
Yes
|
Yes
|
Yes
|
Yes
|
| Do I have to pay myself superannuation, workers comp etc...? |
No
|
No
|
Yes
(if employed by the company) |
Yes
(if employed by the company) |
| Can I change the legal structure easily? |
Yes
|
No
|
No
|
No
|
| Do I have the ability to plan tax through avenues like income splitting? |
No
|
Yes
|
Yes
|
Yes
|
| Is it easy to raise capital? |
No
|
Yes
|
Yes
|
Yes
|
| Is it easy to dissolve or exit? |
Yes
|
Yes
|
Yes
|
No
|
The Australian Taxation Office publication, Tax basics for small business, includes a section on business structures.
Workers' compensation insurance cover is not available for sole traders or partners. Cover is optional for working directors, and conditions apply.
Sole traders and partnerships employing workers are covered by the state industrial relations system. Visit the Department of Commerce website for more information, or contact Wageline 1300 655 266. Constitutional corporations, including small businesses operating with a company structure, are covered by the federal workplace relations system. See the Fair Work Online website, or contact 13 13 94.