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.

Differences between a sole trader and a company

  • 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.

Checklist: Differences between a sole trader and a company

  • 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.

Potential personal liability as a sole trader vs. a company director

  • 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.

Tax differences between a sole trader and a company

  • 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.

More information...

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