Set Up of Company and Other Business Structures

The sole trader structure is the simplest option for many small businesses just starting out. As a sole trader business, you and the business are treated as the same legal entity — there’s no legal separation between your personal assets and your business assets. This makes set-up quick and inexpensive, but it also means unlimited personal liability, which is an important part of weighing the advantages and disadvantages before you commit to this structure.

Partnership and Partnership Business Structure

A business partnership involves two or more people carrying on a business together and sharing profits, losses, and responsibilities. The partnership business structure relies on a clear partnership agreement setting out how partners — and other partners joining later — share income, make decisions, and handle disputes. Australia recognises a general partnership, where all partners share unlimited liability, as well as a limited partnership, where some partners’ liability is limited to their investment in the business.

Partnership Business Structure: Agreements and Limited Partnership Options

A well-drafted partnership agreement protects all partners by clearly setting out roles, profit-sharing, and exit terms. Whether you’re forming a general partnership or a limited partnership, getting this document right early on prevents disputes as the business partnership grows.

Company Business Structure and Company Structure Basics

A company structure creates a separate legal entity from its owners, registered under the Australian Corporations Law and regulated by the Australian Securities and Investments Commission. This company business structure is often considered a complex business structure, but it offers limited liability protection, meaning shareholders‘ personal liability is generally limited to the amount unpaid on their shares. This structure suits many Australian businesses, including a foreign company looking to establish operations locally, and typically requires registering a company name with ASIC.

Trust and Other Business Structures

Beyond the main types already covered, many Australian businesses also consider a trust business structure, often paired in a company and trust arrangement for extra asset protection. A trust holds assets on behalf of beneficiaries, giving flexibility in how business profits are distributed. Other business structures worth knowing about include the social enterprise, which combines commercial activity with a social purpose, offering another path beyond the standard corporations model.

Joint Venture as a Business Structure

A joint venture is where two or more parties combine resources to pursue a specific project, without necessarily creating a new legal entity of the kind seen in corporations. Because a joint venture isn’t always a single structure, it’s worth getting advice on how liability, asset protection, and profit-sharing will work before you begin business activities together.

Liability and Asset Protection

Liability is one of the biggest factors driving a business changes decision to restructure. A sole trader or general partnership exposes personal assets directly, while a company structure or trust can offer stronger asset protection and limited liability. Understanding this trade-off is central to choosing the right business structure for your circumstances.

Registering Your Business Name

Once you’ve settled on the right structure, you’ll need to register your business name with ASIC (unless you’re a sole trader trading under your own personal name). This is the name your business on behalf of its owners and any employees will use for contracts, invoices, and everyday business activities.

Trusted Business Structure Advisors

Our team at Kennedy Tax and Business Services have a wealth of experience setting up and structuring new businesses. Whether you are a sole trader or looking to scale your business, we can advise you on the advantages of different business structures to determine the right entity for you.

Contact us here to arrange a consultation and get expert guidance on the right business structure, tax obligations, and set up of company and other business structures for your situation.