Business structures
The common business structures in Australia.
You need to choose a structure that is right for your business.
The structure you choose will impact your legal requirements, including taxes and reporting. You must understand these requirements when you decide.
Find out about the different tax requirements on the Australian Taxation Office website.
Different structures
Common business structures include:
- sole trader
- partnership
- company
- trust
- cooperative.
Sole trader
A sole trader is used by individuals who are running a business.
This individual is legally responsible for the business, including debts.
You won't need to register a business name if you use your own name. You can also use your own tax file number (TFN) and report business income on your individual tax return.
Partnership
A partnership is two or more people who share the control, income and losses of a business.
The partnership needs its own TFN and Australian business number (ABN).
Company
A company is a legal entity.
It's more complex than a sole trader or partnership structure.
A company is owned by shareholders. Operations are controlled by directors.
Companies are regulated by the Australian Securities and Investments Commission (ASIC).
You will need to register a company using the Australian Government's Business Registration Service.
Trust
A trust is a structure where a trustee carries out the business on behalf of the trust’s members (or beneficiaries).
A trustee may be a person or a company.
A beneficiary can be a person, a company or the trustee of another trust.
To set up a trust you need a formal deed that explains how the trust will operate.
There are different types of trusts with different rules. Read more on the Australian Taxation Office website.
Cooperative
A cooperative is a legal entity made up of five or more people.
It's jointly owned and democratically controlled by its members.
In the Northern Territory (NT), cooperatives are administered by Licensing NT under the Cooperatives National Law.
Find out more about registering a cooperative.
Choose the right structure
Work out which business structure best suits your needs using the Australian Government's Help me decide tool.