Business Structures

A good business structure is essential to get the most out of your business and investments. Your structure should safeguard your business and personal assets and maximise your growth potential.

We will endeavour to give your business the best start with our expert advice and support. See below for a summary of each structure we can offer you:

  • Sole Trader

    A Sole Trader is a structure where the business operates under your own name with full ownership.

    Advantages:
    - Basic structure
    - Inexpensive to set up and run

    Disadvantages:
    - No asset protection
    - No income splitting
    - Income is taxed at your marginal tax rate

  • Partnership

    A Partnership is a structure where the business is run by two or more people or entities as co-owners.

    Advantages:
    - Basic structure less expensive than an entity to set up and run
    - Asset protection can be obtained with a partnership of trusts
    - Income is split between partners
    - Losses distributed to each partner & used against other income

    Disadvantages:
    - All partners are liable
    - No asset protection when partners are individuals
    - Income must be distributed to each partner as per agreement
    - Income is taxed at each partner’s marginal rate

  • Company

    A Company is a structure where the business is run under a separate legal entity.

    Advantages:
    - Asset protection
    - Easy to admit new owners by selling and buying shares
    - Lower tax rate than the top marginal rate of individuals
    - Profits can be retained in the company

    Disadvantages:
    - Highly regulated
    - Directors can be liable for company debts
    - More expensive to set up and run
    - Losses can’t be distributed to shareholders
    - Loaning money to shareholders and associates has tax implications

  • Trust

    A Trust is a structure where the business is run by a trustee on behalf of the trust’s beneficiaries.

    Advantages:
    - High asset protection with a corporate trustee
    - Less regulated than a company
    - Flexible income splitting
    - Control easily transferred by changing trustee

    Disadvantages:
    - More expensive to set up and run
    - Losses can’t be distributed
    - Income must be distributed and is taxed at the beneficiary’s marginal rate