What business structure suits your business?

An important decision to make before you start a business is what structure your business will run under.

This will reflect into all facets of your business, so you should spend time understanding the implications of each structure.


Sole Trader

  • You have complete control of your business.
  • Your business assets and liabilities are not separate from your personal assets and liabilities.
  • Personally liable for debts and obligations of the business
  • Low-cost structure



  • Share control and management of business
  • Each partner pays tax on the share of net partnership income each receives
  • Minimal reporting requirements + Inexpensive to set up
  • Requires more documentation



  • Separate legal entity from its owners – all profit, tax, and legal liability is directly to the corporation
  • Members not liable for company’s debt (only liable if you breach legal obligations)
  • Complex business structure plus Extensive documentation and record-keeping
  • Wider access to capital



  • Expensive set-up and operation
  • Formal trust deed outlining operation required
  • Trustee responsible for yearly administrative tasks


For any advice on which structure is most suitable for your business, contact accounting@agsfinancialgroup for a discussion.

Want to know more about the pros and cons of entering a Partnership? Click here 

Published : 07 Dec 2020

Verified by MonsterInsights