Your business structure

Choosing a business structure 

When you start a business, it's important to choose a structure that suits your needs.

This page provides information on the most common business structures.

We also recommend visiting business.gov.au for more information about choosing a business structure.

Should I register a business name?

A business name is a name or title under which a person or entity conducts business. If you operate a business in Australia and don't trade under your own name, you'll need to register a business name.

The following information describes the types of structures you can choose when running your business. ASIC does not register these structures - we only register the business name. There is no requirement to register the business structure.

Sole trader

A sole trader is the simplest business structure. The structure is inexpensive to set up because there are few legal and tax formalities.

If you operate as a sole trader, you're responsible for all aspects of the business, including any debts the business incurs.

Partnership

A partnership is two or more people or entities who do business as partners or receive income jointly.

In a partnership, control or management of the business is shared. A partnership is not a separate legal entity so you and your partners are liable for all debts and obligations of the business. A formal partnership agreement is common, but not essential.

The information you need to provide when registering a business name depends on who holds that name. Learn more.

Joint Venture

A joint venture is two or more people or entities who join to do business together for a particular purpose, usually a single project, rather than as an ongoing business.  A joint venture will often have a joint venture agreement. 

Should I register a company?

A company is a separate legal entity. This means it has the same rights as a natural person and can incur debt, sue and be sued. 

A company is a complex business structure, with higher set-up and administrative costs. Companies must be registered with ASIC, and company officeholders have legal obligations under the Corporations Act.

See starting a company to learn more about company structures.

Company vs business name

The table below outlines the key differences between registering a business name and a proprietary company. (The majority of companies registered are proprietary companies).

The information is an overview only and should not be considered advice. See a professional business adviser if you need more information.

 

Business Name

Proprietary Company, e.g.  Example Company Pty Ltd

Overview

A business name is a name or title under which a,

  • Sole trader (individual)
  • Incorporated entity (i.e Company, Association)
  • Partnership
  • Joint Venture
  • Trust

can conduct business.

To register a business name you must hold an Australian Business Number (ABN).

Registering a business name does not provide exclusive ownership of that name. It also doesn't prevent other people from being able to register and use similar names.

A company is an entity that has a separate legal existence from its officeholders and members

Its legal status gives a company the same rights as a natural person which means a company can own, buy and sell property in its own name. It can also incur debts, employ staff, sue and be sued. 

Companies are managed by company officers who are called directors and company secretaries.

 

Key attributes

  • Is not a separate legal entity
  • Is simple to set up and operate.
  • Requires fewer reporting requirements and is generally a low-cost registration.
  • Business name holders must comply with notification obligations under the Business Name Registration Act

 

  • Is a separate legal entity.
  • Has limited liability compared to other structures.
  • Is a more complex business structure to set up and operate.
  • Involves higher set up and running costs than other structures.
  • Requires you to understand and comply with all obligations under the Corporations Act 2001.

 

Cost to register 

Choice of registration period

$34 for one year

$80 for three years

 

Proprietary Company  $469

Ongoing costs

Choice of renewal period

$34 for one year

$80 for three years

 

Annual Review Fee - $249

Late fees can be imposed if you fail to pay the annual review fee or lodge documents on time. (See ASIC fees)

Responsibilities

Renew every one or three years

 

Update your details if they change

 

If you’re a director or secretary of a proprietary company, you must follow the requirements set out in the Corporations Act 2001 (Corporations Act).

Your company and the law

Closing

If you no longer need the business name, you can cancel it (or we will cancel it for you if you don't pay the renewal fee).

 

If you no longer need your company you will need to apply to have it deregistered (or we may cancel your registration if you don't pay your annual review fee).

Cancelling the company's ABN will not deregister the company. 

Online system

ASIC Connect

ASIC Online Services 

What is a trust?

A trust is an obligation imposed on a person – the trustee – to hold property or assets (e.g. business assets) for the benefit of others (known as beneficiaries).

Setting up a trust requires a formal deed, as well as the completion of yearly administrative tasks.

If you operate as a trust, the trustee is responsible for its operation.

A trustee can be a company registered with us. If the trust does business under a name other than its own, the name must be registered as a business name with ASIC.

Before deciding on your business structure, we recommend speaking with a professional business adviser. This could be a lawyer or an accountant.

Related links

 

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Last updated: 01/12/2016 03:46