Change your sole trader business to a company
Decide if a company structure is the right structure for you
Before you make any formal changes, it’s important to know if a company structure is the right structure for your evolving business. These steps can help you decide if a company structure is right for your business:
Use our Help me decide tool to check if a company structure best suits your business needs.
You should consider seeking professional legal and tax advice before you make changes to your business.
If you’re thinking of changing from a sole trader to a company, it’s important you know what your reporting and legal obligations are.
Be sure you know the different costs, liability requirements and reporting obligations. Learn more about the difference between a sole trader and a company.
Sole traders and companies have similar tax and reporting obligations, but you should be aware of the key differences.
Learn about the tax differences between a sole trader and a company.
Before you register
You’ll need to prepare and do things like:
- consider the structure of your company and how it will operate
- decide on the officeholders (directors and secretaries)
- choose a company name (that is, the company’s legal name)
- understand your legal obligations as a director and shareholder.
Set up your company
Once you decide to set up a company structure, you will need to do 3 key actions.
1. Register your company
You can register your company through the Business Registration Service. This service allows you to apply for an Australian company number (ACN), company name, Australian business number (ABN), business name, and other key business registrations at the same time.
2. Transfer assets
After your company is registered, you should transfer any licences and assets (including trademarks and other IP) to the new company.
3. Cancel your ABN
If you’ve been using your sole trader ABN to do business, you’ll need to cancel it. You cannot transfer your sole trader ABN to your new company.
Ongoing company compliance
As a company, you’ll need to comply with additional reporting obligations. Company obligations include:
- record keeping
- lodgement of financial records
- company registrations and fee payments
- notification of changes to company details, including updating ABN details on the Australian Business Register (ABR).
You can find more detail about company officeholder's legal responsibilities on the ASIC website.
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