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A company means your business is a separate legal entity from you. It has at least one owner (shareholder) and one director. You can be both.

Think carefully before you change your business structure. Switching from a sole trader to a company can boost your business and protect your personal assets, but it adds more rules and paperwork.

Before you change:

  • research if a company is right for your goals
  • get professional legal and tax advice (if needed)
  • prepare well so the transition goes smoothly.

Decide if a company is right for you

Before you make any changes to your business, take these steps to find out if a company structure is right for you.

Our work out your business registrations tool can help you choose the right business structure. It also tells you what registrations you’ll need if you change to a company.

It’s important you know what reporting and legal obligations you’ll have if you become a company. There’s also different set-up and ongoing costs.

Learn about the difference between a sole trader and a company.

Sole traders and companies have similar tax and reporting obligations, but there are some differences.

Learn about the tax differences between a sole trader and a company.

Before you register

Get your business ready before you make any formal changes. This will help you meet any new legal obligations and run your company well.

Here are some things you need to do:

Set up your company

To set up a company structure, you’ll need to take 3 main steps.

1. Register your company

Register your company using the Business Registration Service. This lets you apply in one place for the main business and tax registrations you’ll need, such as:

  • business name
  • company name
  • Australian Company Number (ACN)
  • Australian Business Number (ABN).

2. Transfer assets

After you register your company, transfer any existing licences and assets to the new company. This includes trademarks and other intellectual property (IP).

3. Cancel your ABN

You can’t transfer your sole trader ABN to your new company. If you’ve been using it to run your business, you’ll need to cancel it.

Before you cancel your ABN, make sure you meet any lodgement, reporting and payment obligations you have with any government agencies.

Cancelling your sole trader ABN will also cancel any registrations you have for:

  • goods and services tax (GST)
  • luxury car tax (LCT)
  • wine equalisation tax (WET)
  • fuel tax credits (FTC).

Ongoing legal compliance

If you run a company, you have ongoing legal responsibilities. These include:

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