Sole Trader vs Company: Which Structure Is Right for You?

Choosing the right business structure is one of the most important decisions you’ll make when starting out. Get it right and you’ll save tax, protect your assets and make life simpler. Here’s a plain-English comparison for business owners around Wallan and the Mitchell Shire.

Sole trader

Best for: simple, low-risk businesses and side hustles. It’s cheap and easy to set up — you just need an ABN. The downside is that you’re personally liable for the business, and all profit is taxed at your individual rate.

Partnership

Best for: two or more people going into business together. Income is split between partners, but like sole traders, partners are personally liable.

Company

Best for: growing businesses that want liability protection and a flat company tax rate. A company is a separate legal entity, which limits your personal liability, but it costs more to set up and run and has more compliance.

Trust

Best for: family businesses and asset protection, offering flexibility in how income is distributed. Trusts are more complex and need careful management.

So which should you choose?

There’s no one-size-fits-all answer — it depends on your income, your risk, and your plans for growth. The wrong structure can cost you thousands in unnecessary tax or leave your personal assets exposed.

We help new and established businesses choose and set up the right structure. Call Shannon on 0430 339 398 for a free consultation and get it right from the start.