Thousands of Australians start businesses each year without fully thinking through their structural options. Structure is not an administrative formality. It determines your personal exposure to business liabilities, how your income is taxed, whether you can bring in partners, and how complex your ongoing compliance obligations will be.
Choosing the wrong structure at the beginning costs more to fix later than getting it right the first time. Lodge with P&D Accountants handles business registrations for clients across Australia. We work through the structural decision with you before filing a single form.
The four main business structures in Australia
Sole trader
The simplest and most common starting point. You operate under your own name or a registered business name, and there is no legal separation between you and the business. All business income is included in your individual tax return and taxed at personal rates. Your personal assets — home, car, savings — are exposed to business debts and claims.
A sole trader structure suits freelancers, consultants, and tradespeople who are starting out and want minimal setup cost and simple administration.
Company (Pty Ltd)
A proprietary limited company is a separate legal entity. It has its own ABN and ACN, files its own tax return, and pays company tax at 25 per cent for base rate entities with turnover under $50 million. Directors and shareholders have limited personal liability in most circumstances.
A company suits businesses with multiple owners, businesses that hold assets or carry significant liabilities, and businesses that may eventually seek external investment. Setup costs include ASIC registration (currently $538), and ongoing obligations include an annual company tax return, ASIC annual review fees, and potentially payroll tax if staff are employed.
Trust
A trust is a structure where a trustee holds assets for the benefit of beneficiaries. The trustee — which can be an individual or a company — manages investments and determines how income is distributed. Because income can be distributed to beneficiaries with lower marginal tax rates, trusts offer significant tax planning flexibility for family businesses.
Trusts have more complex setup and administration requirements than sole traders or companies. A properly drafted trust deed is essential. Trusts are used widely for family businesses, property holding, and asset protection.
Partnership
Two or more people carrying on business together. Profits and losses are split between partners according to a partnership agreement and included in each partner's individual tax return. All partners are jointly and individually liable for the partnership's debts. A formal, written partnership agreement is strongly recommended before you begin operating.
What registrations are required?
Australian Business Number (ABN)
An ABN is required for anyone conducting business in Australia. Without one, anyone who pays you for services or goods is obligated by law to withhold 47 per cent of the payment and remit it to the ATO. ABN registration is free and processed through the Australian Business Register.
Australian Company Number (ACN)
Only companies have an ACN. When you register a company with ASIC, an ACN is assigned automatically. Companies must display their ACN on all official correspondence, invoices, and contracts.
GST registration
You are required to register for GST once annual turnover reaches $75,000. Ride-sharing drivers and taxi operators must register from the first dollar of income, regardless of turnover. Once registered, you collect 10 per cent GST on taxable sales, report it on a Business Activity Statement, and claim input tax credits on eligible business purchases.
Business name registration
If you trade under a name other than your own legal name (for sole traders) or the company's registered name, you must register the business name with ASIC. Registration costs $44 for one year or $102 for three years.
PAYG withholding
If you employ staff or engage contractors who have not quoted an ABN, you must register for Pay As You Go withholding and report through Single Touch Payroll from the first pay run. STP is mandatory for all employers regardless of size.
The compliance calendar every new business needs
Once registered, your business has ongoing obligations with fixed deadlines. A registered tax agent will configure these and send reminders so you never face late lodgement penalties:
- Quarterly BAS lodgement and payment, due 28 days after the end of each quarter
- Annual company tax return, due 31 October or later if lodging through a registered agent
- Monthly PAYG withholding payments if annual withholding exceeds $25,000
- ASIC annual review fee, due on the anniversary of company registration
- Payday super from 1 July 2026: superannuation contributions must be paid on each payday rather than quarterly
How P&D Accountants handles business registrations
Our business registration service covers the entire process: structure consultation, ASIC company registration, ABN and TFN applications, GST and PAYG withholding setup, and a 12-month compliance calendar specific to your entity type. We also set up your business in LodgeiT ready for BAS preparation.
A 30-minute consultation with a CPA-qualified accountant before you register is genuinely worth the time. The decisions made at setup are not easily undone.
Starting a business?
Talk to a CPA-qualified accountant before you register. We handle the structure decision, ASIC registration, and every setup form for you.
Call us on 0468 070 010Frequently asked questions
Do I need an ABN before I start trading?
You should register for an ABN before you begin invoicing clients. Trading without an ABN means clients are legally required to withhold 47 per cent of payments they make to you. ABN registration is free and can be completed within a few days.
What is the difference between an ABN and an ACN?
An ABN is a tax identifier for any business in Australia. An ACN is a company registration number issued by ASIC and is only relevant to proprietary limited companies. Every company has both an ABN and an ACN.
When do I need to register for GST?
You must register for GST once your annual turnover reaches $75,000. You can register voluntarily before that threshold if you want to claim input tax credits on your business purchases. Some industries, including ride-sharing and taxi services, must register regardless of turnover.
Can I change my business structure later?
Yes, but restructuring after the fact typically involves tax and legal costs that could have been avoided with the right structure from the start. Common examples include moving from a sole trader to a company as the business grows, or establishing a trust to facilitate family income splitting. These transitions are manageable but add cost and administrative complexity.