Business Structure Comparison

Detailed side-by-side comparison of Australian business structures

Quick Comparison

StructureLiabilityTax RateComplianceSetup Cost
Sole Trader
Unlimited personal liabilityIndividual rates (19-45%)
Very Low
$0-$200
Partnership
Joint and several unlimited liabilityIndividual rates for each partner
Low
$500-$2,000
Company
Limited to company assets25% (small biz) or 30% (standard)
High
$1,500-$5,000
Discretionary Trust
Limited (with corporate trustee)Distributed at beneficiary rates
Very High
$3,000-$8,000
Unit Trust
Limited (with corporate trustee)Flow-through to unit holders
High
$2,500-$6,000

Detailed Analysis

Sole Trader

Single owner only

Liability:

Unlimited personal liability

Tax Rate:

Individual rates (19-45%)

Setup Requirements

Cost:$0-$200
Time:1-2 days
ABN registration
Business name (optional)
Basic insurance

Ongoing Requirements

Annual Cost:$500-$2,000/year
Reporting:
Individual tax return
BAS (if GST registered)

Best For

Low-risk service businesses
Testing business ideas
Part-time or side businesses

Partnership

2-20 partners

Liability:

Joint and several unlimited liability

Tax Rate:

Individual rates for each partner

Setup Requirements

Cost:$500-$2,000
Time:1-2 weeks
Partnership agreement
ABN registration
Business name registration

Ongoing Requirements

Annual Cost:$2,000-$5,000/year
Reporting:
Partnership tax return
Individual partner returns

Best For

Professional practices (law, accounting)
Family businesses
Joint ventures

Company

Shareholders (unlimited number)

Liability:

Limited to company assets

Tax Rate:

25% (small biz) or 30% (standard)

Setup Requirements

Cost:$1,500-$5,000
Time:2-4 weeks
ASIC registration
Constitution/replaceable rules
Share structure
Directors appointed

Ongoing Requirements

Annual Cost:$3,000-$15,000/year
Reporting:
Company tax return
ASIC annual review
Financial statements

Best For

Medium to large businesses
Asset protection requirements
Multiple owners/investors

Discretionary Trust

Beneficiaries (flexible)

Liability:

Limited (with corporate trustee)

Tax Rate:

Distributed at beneficiary rates

Setup Requirements

Cost:$3,000-$8,000
Time:3-6 weeks
Trust deed
Corporate trustee
ABN/TFN
Appointor designation

Ongoing Requirements

Annual Cost:$5,000-$20,000/year
Reporting:
Trust tax return
Distribution statements
Trust minutes

Best For

High-income earners
Family businesses
Investment properties

Unit Trust

Unit holders (proportional)

Liability:

Limited (with corporate trustee)

Tax Rate:

Flow-through to unit holders

Setup Requirements

Cost:$2,500-$6,000
Time:2-4 weeks
Trust deed
Unit holder agreements
Corporate trustee
ABN registration

Ongoing Requirements

Annual Cost:$4,000-$15,000/year
Reporting:
Trust tax return
Unit holder statements
Distribution records

Best For

Joint investment ventures
Property syndicates
Investment funds

Professional Advice Essential

Business structure decisions have significant legal, tax, and financial implications that vary based on your specific circumstances. This comparison provides general information only.