Accounting and advice for new businesses

Start with the right foundation

The decisions made in the first few weeks of a business, such as its structure, how it is registered and how its records are kept, shape the tax it pays and the paperwork it carries for years. They are much easier to get right at the start than to unwind later.

That is why David Ross, who founded Ross Accounting in 2003 and has a background in banking and mortgage finance, offers a free half hour of advice to people setting up a new business. It is a chance to talk through your plans, your likely income and who you are going into business with before anything is registered.

The structure is the foundation of a business, which is why David offers a free half hour of structure advice before anything is registered.

Choosing a business structure

business.gov.au describes several business structures, including a sole trader, a partnership, a company and a trust. Each one treats liability, tax and ongoing obligations differently.

• Sole trader: the simplest structure, and business.gov.au says it is fairly easy and inexpensive to set up. You lodge using your own tax file number, but you are personally responsible for the business's debts and losses, and business.gov.au notes that your personal assets are at risk if things go wrong. Profits cannot be split with family members.
• Partnership: two or more people sharing the income or losses of a business. The partnership needs its own ABN and TFN and lodges a partnership tax return every year, while each partner pays income tax on their share of the partnership income.
• Company: a legal entity separate from its owners. business.gov.au describes companies as expensive and complicated to set up, every director needs a director ID, and directors make a solvency declaration each year. Our company formation service covers the steps and fees.
• Trust: a trustee runs the business for the beneficiaries. business.gov.au describes trusts as expensive and complicated to set up; they need a formal trust deed and yearly administrative tasks by the trustee.

There is no single right answer: the best structure depends on the kind of business, the risks involved, how much it is expected to earn and your family circumstances. Our guide to choosing a business structure compares the options in more detail, and our starting a business service explains how we help you decide.

Your first registrations, in order

The registrations a new business needs depend on its structure, so they follow that decision. These are the common ones; some industries also need state or council licences.

1. Australian Business Number (ABN): free through the Australian Business Register. You need to be running a business or enterprise to be entitled to one. If an online application has all the information needed, you find out the result as soon as it is completed; applications that are reviewed can take 20 business days. Business details must be updated within 28 days of a change. See our guide to registering an ABN and business name.
2. Business name: business.gov.au explains that trading under an unregistered business name is an offence unless the name is the same as your own name. Business names are registered with ASIC, and business.gov.au lists the fee as $47 for 1 year or $108 for 3 years (checked October 2026). The name must be shown wherever you trade and on invoices and quotes. Registering a business name does not give you exclusive rights to it; that takes a trade mark.
3. Director ID and company registration if you choose a company. ASIC and ABRS state that a person must apply for a director ID before being appointed as a director, and that no one else can apply on their behalf. Read our director ID guide and company registration guide.
4. GST, once you reach or expect to reach the threshold (see below). Our GST registration guide explains how turnover is worked out.

GST, BAS and tax in the first year

Under the ATO's current rules (checked October 2026 for the 2026–27 year), a business must register for GST when its GST turnover is $75,000 or more, and a new business must register from the start if it expects turnover to reach $75,000 in its first year of operation. Turnover is tested two ways: the current month plus the previous 11 months, and the current month plus the next 11 months. Once you reach the threshold, you have 21 days to register. Some businesses must register whatever their turnover, including taxi and ride-sourcing drivers and businesses earning income through the sharing economy or digital platforms. A business that registers voluntarily generally has to stay registered for at least 12 months.

A business with GST turnover under $20 million generally lodges its business activity statement (BAS) quarterly, unless the ATO has told it to report monthly or it chooses to. Businesses registered voluntarily with GST turnover under $75,000 lodge annually instead. The ATO lists these quarterly due dates:

The ATO notes that lodging online, or through a registered tax or BAS agent, may give extra time, except for the October to December quarter, which already includes a one-month extension. Our BAS due dates guide has the details.

New business owners are often caught out by income tax in the second year. Once your first return shows business income, the ATO may put you into PAYG instalments, which spread next year's tax across quarterly payments. Under the thresholds on the ATO's page (checked October 2026), a sole trader or trust is entered automatically when instalment income from the latest return is $4,000 or more, tax on the latest assessment is $1,000 or more, and estimated (notional) tax is $500 or more. The ATO suggests that people new to business consider entering PAYG instalments voluntarily, and setting money aside from the first day can help avoid an unexpected bill. Read more in our PAYG guide.

Equipment and start-up costs

Many new businesses buy tools, computers or fit-out items in their first year. For 2026–27, a small business with aggregated turnover under $10 million that uses the simplified depreciation rules can generally deduct the full cost of each eligible asset costing less than $20,000 in the year it is first used or installed ready for use. The ATO confirms the $20,000 limit was made permanent from 1 July 2026 and that this measure is now law.

Assets that cost $20,000 or more can go into the small business simplified depreciation pool, which is depreciated at 15% in the first income year and 30% each year after that. Our instant asset write-off guide explains the conditions.

If you will hire staff

Taking on your first employee brings new obligations: withholding tax from wages, reporting each pay through Single Touch Payroll, and paying super. From 1 July 2026, Payday Super requires employers to pay super guarantee for each payday rather than quarterly. The rate for 2026–27 is 12% of qualifying earnings, and contributions must generally reach the employee's fund within 7 business days of payday, or 20 business days for the first contribution for a new employee.

Our Payday Super guide, Single Touch Payroll guide and payroll service cover what a new employer needs to set up.

Records and bookkeeping from day one

The ATO requires a business to keep records of all transactions relating to its tax and super as it starts, runs, changes or closes, and most records must be kept for 5 years. Where an expense is partly private, you need records that show the business share. business.gov.au does not require a sole trader to have a separate business bank account, but recommends one because it makes income and expenses much easier to track.

We can set up your bookkeeping in Xero or MYOB so that GST, BAS and year-end accounts flow from the same records. Angela Ross has bookkeeping experience with MYOB, QuickBooks and Xero across many small businesses. Clients can also send receipts and documents through the MyAccountants app using the code "Ross". See our bookkeeping service and business record keeping guide.

How Ross Accounting helps new businesses

• Structure advice, starting with a free half hour with David Ross
• ABN, business name, GST and company registrations
• Bookkeeping set-up and ongoing bookkeeping in Xero or MYOB
• Quarterly BAS and your first business, partnership, company or trust tax return
• Business leases and franchise agreements reviewed by Geoff Versace, the solicitor who practises from our offices
• Loans for fit-outs and vehicles through Greg Kearns, a mortgage broker who works with the firm

Ross Accounting Pty Ltd is a registered tax agent with the Tax Practitioners Board (registration number 21430015). Our head office is in Brookvale on Sydney's Northern Beaches, with a branch in Redland Bay for clients in South East Queensland. Contact us to book a time.

Frequently asked questions

General information only, not personal advice. Tax rules change and your circumstances matter, so talk to us before acting. See our disclaimer.