Are my personal assets protected by the business structure?

Sole trader

A sole trader is a simple business structure to set up as there are less complex legal or tax obligations. It’s important to understand that when you operate as a sole trader you are:

  • the sole owner of the business with full control over the decision making
  • personally responsible for business liabilities, including debts.

Personal assets in your name, such as property, may be used to recover debts of your business if you are unable to repay them. This includes any assets jointly owned.


A company can be a more complicated business structure to set up as there are more complex legal and tax obligations.

Having a company business structure doesn't necessarily mean that any personal assets will be protected.

A company is a separate legal entity, which means it exists under the law in its own right and can do nearly all of the things that a normal person can do, for example, enter into contracts, borrow money and buy and sell assets.

If the company has liabilities or owes debts, it’s generally the company’s responsibility to pay those debts. If the company is unable to pay its debts and enters into liquidation, the company assets may be sold to help pay for any outstanding company liabilities.

More information

Thanks for your feedback. If you have any ideas on how we can improve, we'd love to hear them.

Please provide your comments in the feedback form.

You might also be interested in