Sole trader to a company
Whether you've been in business for years or you're just starting out, choosing the right structure for your business is important.
Your business structure can determine:
- how much tax you pay
- your responsibility as a business owner
- your potential personal liability
- your asset protection
- ongoing costs and volume of paper work for your business.
To help you understand the differences between a sole trader and a company when choosing or changing your business structure, read through the sections below.
- This section includes information to help you understand the differences between a sole trader and a company business structure. Check out this resource for a high-level summary of potential personal liability, taxation, your duties as a company director, paperwork and more.
- This checklist can be used as a summary when choosing or changing business structures. It can help you understand the key differences between a sole trader and a company structure. You can tick off each checklist item as you understand it or print the checklist and take it with you.
- This section includes information to help you understand your potential personal liability. Check out this resource for information on asset protection, business insurance, taking money out of the business bank account and more.
- This section includes information to help you understand the tax differences between a sole trader and a company business structure. Check out this resource for information on small business tax concessions, what type of tax return needs to be lodged, the tax free threshold, income tax rates and more.
The Small Business Fix-it Squad
To help make it easier for you to choose the right business structure, we've teamed up with the Australian Taxation Office (ATO) and the Australian Securities and Investments Commission (ASIC) as part of the Small Business Fix-it Squad to develop this information. Through this joint-agency initiative, we've created these resources to help you:
- understand the differences between a sole trader and a company business structure
- understand company director responsibilities
- find out how to change a business structure
- know where to go for further information and help.
- Check out our resources to quickly find out the difference between a company and a sole trader, your potential personal liability, and the tax differences between a sole trader and a company.
- Use our Checklist: Differences between a sole trader and a company to keep track of your understanding between the two business structures.
- Read our Business structures section for info on the four business structures you can choose from when starting or growing your business.
- Browse our Reminders when running your company page for a handy list of things you'll need to be aware of when running your company.
- Find out what steps are required when changing from a sole trader to a company.
- Visit ASIC's Guide for Small Business Directors for an in-depth look at your obligations and responsibilities as a company director.
- Watch the ASIC video on Registering a business name to help you get started.
- Watch the Essential Tips and Tools for Small Businesses webinar - a joint-agency webinar with general information about small business ownership.
- Watch the Australian Taxation Office’s (ATO) video Working out your income tax: tax basics for small business to find out the difference in calculating tax for a sole trader and a company.
- Seek professional advice from a lawyer, accountant or Advisory Services when choosing or changing your business structure, to help you make the right decision based on your individual circumstances.