Starting a business? Plan for success from day one

Who it is for

• People leaving a job to work for themselves as a sole trader or contractor
• Two or more people going into business together and weighing a partnership against a company
• Founders who want limited liability or plan to bring in investors
• Families looking at a trust to hold a business and protect assets
• Existing sole traders whose business has grown and who are thinking about changing structure

Your business structure matters

The right business structure depends on the type and size of your business, your personal circumstances and your projected growth. It is integral to your success because it determines your tax liabilities, your responsibilities, your personal liability, your asset protection and your ongoing costs.

Setting the right foundation is important, so why not take up a free half hour of advice with David before you start? David Ross founded Ross Accounting in 2003 and has a background in banking and mortgage finance.

A structure is much easier to get right at the start than to change later, because a change of structure generally means new registrations and transferring assets.

The four common structures compared

business.gov.au lists several business structures, including co-operatives and joint ventures. This page focuses on the four that new small businesses most often weigh up. The table below sets out the main differences in general terms, based on business.gov.au and ATO guidance current at October 2026.

Sole traders and partnerships are generally the cheapest and simplest to set up and run. Companies and trusts cost more to establish and maintain, and business.gov.au describes both as complicated to set up, so the extra cost needs to be weighed against the protection and flexibility they offer. Our guide to choosing a business structure goes into more detail.

Tax differences worth understanding early

The structure you choose changes how much tax is paid and when. These are some of the points we talk through when helping you decide.

• Tax-free threshold: a sole trader's business income is added to their other income, and the first $18,200 of an Australian resident's taxable income is tax free for 2026–27. A company pays tax from its first dollar of taxable income.
• Company tax rate: the ATO applies a 25% rate to base rate entities and 30% to all other companies, from the 2021–22 income year onwards. As the company is a separate entity, a director or employee of the company still lodges their own individual tax return as well.
• Capital gains: a sole trader who sells an asset owned for at least 12 months may be able to reduce the capital gain using the discount method, but business.gov.au notes that the discount method generally does not apply to companies.
• Small business concessions: these are open to any structure. For tax purposes, a business is generally a small business entity if its aggregated turnover is under $10 million.
• Discretionary trusts: in the 2026–27 Federal Budget the Government announced a 30% minimum tax on discretionary trusts from 1 July 2028. The ATO states that this measure is not yet law, so it is worth keeping an eye on before setting up a new family trust.

Registrations checklist for a new business

Most new businesses need several registrations in a particular order. This checklist covers the common ones; your business may also need state or local licences and permits.

1. Choose your structure first. The ABN, business name and tax registrations all depend on it.
2. Register for an ABN. It is free through the Australian Business Register. You must be running a business or enterprise to be entitled to one. If your online application is complete you generally receive the ABN straight away; some applications are reviewed, which can take 20 business days. See our guide to registering an ABN and business name.
3. Get a TFN for the business if it is a partnership, company or trust, as each needs a separate TFN. A sole trader uses their own individual TFN.
4. Register a business name if you will trade under any name other than your own first name and surname (or the company's exact registered name). Registration is national through ASIC and, from 1 July 2026, costs $47 for 1 year or $108 for 3 years. You need an ABN first, and a registered business name does not give you exclusive rights to it: that requires a trade mark.
5. For a company, apply for director IDs and register with ASIC. Each director must hold a director ID before being appointed, and must apply personally because no one, including an accountant, can apply on their behalf. ASIC's fee to register an Australian company having share capital is $636 from 1 July 2026. See our director ID guide and company formation service.
6. Register for GST when you need to. Registration is required once GST turnover is $75,000 or more ($150,000 for non-profits), including a new business that expects to reach the threshold in its first year, and must be done within 21 days. Taxi, limousine and ride-sourcing drivers must register whatever their turnover. Read more in our GST registration guide.
7. Plan for employer obligations if you will hire staff. Employers withhold PAYG from employees' pay, report and pay those amounts to the ATO, and pay super for eligible employees. Our payroll service can look after this.

Changing structure later

Many businesses start as a sole trader and move to a company or trust as they grow. That is often a sensible path, but it is not just paperwork. business.gov.au states that you must cancel your ABN when changing from a sole trader to a company, from a sole trader to a partnership, or from a partnership to a company, and the new entity applies for its own.

Business assets, contracts, leases, bank accounts and employees may all need to move to the new entity, and each step needs planning to avoid unexpected costs. Planning for growth from the beginning, even if you start small, makes a later restructure smoother. Ross Accounting can model the options for you through our tax advice and planning service.

More than set-up: support as you grow

Once the business is registered, the real work starts. Ross Accounting can look after your bookkeeping in Xero or MYOB, prepare and lodge your BAS, and handle your tax returns each year, whatever structure you choose.

Because our in-house solicitor practises from the same office, legal matters such as business leases and franchising can be dealt with alongside your accounts. See our legal services for details.

How it works

1. 1
   Free half-hour chat

   Tell David about your idea, who is involved, your expected income and your plans for growth.

2. 2
   Compare the structures

   We explain how a sole trader, partnership, company or trust would work for you, including tax, liability, asset protection and running costs.

3. 3
   Register the business

   We help with the ABN, TFN, business name, company registration and GST and PAYG registrations, in the right order. Director IDs must be applied for by each director personally.

4. 4
   Set up your systems

   We set up your bookkeeping software and record keeping so BAS and tax time run smoothly from the first quarter.

What to bring

• A short description of the business, what you will sell and where you will operate
• Names of everyone who will own, run or invest in the business
• An estimate of income and expenses for the first year, if you have one
• Your proposed business or company name
• Details of any assets, vehicles or equipment you plan to bring into the business
• Any existing ABN if you already trade as a sole trader