See what business structure is right for you

Building a new business? Set yourself up for success from the start by choosing the best business structure for your needs. Regardless of the industry you’re in, the way you structure your business will impact your operations (we’ll cover this later) in the short and long term. This could be good or bad! If you choose the wrong structure, the impacts can seriously impact the success of your enterprise… 


So, what are the business structure options, and how can you choose the right fit? For most small businesses, there are four basic choices. Familiarise yourself with each of the four structures to determine which structure is best for your business. 


Four business structures for a small business. 


There are more than four business structures, however these are the most-widely used and appropriate options for small business owners. 


1. Sole Trader. 


A sole trader business is where one person owns, operates, and manages the business. This is a structure commonly used by small and microbusinesses, and a sole trader is not considered a separate legal entity. Examples include tradespeople, shop-owners, consultants, freelancers of any industry, and other small businesses with one main person running it. 


As a sole trader, even though you are solely responsible for running the business, you can still hire employees. You do not need to pay superannuation and workers’ compensation to yourself as a sole trader. 


2. Partnership. 


Like the name suggests, a partnership describes at least two people who jointly own and manage the business — but not as a company. Each party contributes funding, labour, and skills to the business, sharing in the income and liabilities according to agreed ratios. This doesn’t necessarily have to be a 50/50 split, and the specifics are detailed in a Partnership Agreement to ensure all parties are on the same page. Like a sole trader, you do not need to pay superannuation and workers’ compensation to yourself in a partnership structure. 


3. Trust. 


Trusts are legal relationships where a person or persons (the ‘trustees’) hold property or income on behalf of a beneficiary or group of beneficiaries. Trusts are a common business structure for family-run businesses. The benefits include tax minimisation strategies, as well as succession planning opportunities to ensure the future of the business. 


Paying superannuation and workers’ compensation to yourself is compulsory with this arrangement. 


4. Company. 


Companies are a legal entity in their own right, separate from their owners. A different tax structure applies, as well as different administrative requirements. Paying superannuation and workers’ compensation to yourself is compulsory with this arrangement. 


How your business structure affects your business. 


There are six main business areas that will be affected by how you structure your business: 


  • Finances including tax liabilities, superannuation, workers’ compensation, and so on. 
  • Legal controls and constraints. 
  • Administrative burden and costs. 
  • Asset protection. 
  • Personal liability for debts. 
  • Your ability to raise funds. 


Now you know the options, but how do you decide? 


To help you select the most suitable structure for your business, we’ve penned some questions for you to consider. 


1. How big is the business you’re creating? 


If it’s just you in the business (for the foreseeable future at least), its sole trader status will be most favourable. Remember, as a sole trader, you can still hire employees, but you’re solely responsible for running and managing the business. If you have rapid growth plans and require help to run and manage the business, forming a company or partnership may be better. 


2. Can you handle a complex set up procedure? 


The simplest and cheapest form of business structure to register is sole trader or partnership. They are generally quick and easy to set up. If it’s just you in charge of operating the business, you may want to avoid the complexities involved in setting up a trust or company. 


3. How flexible do you need your business to be? 


Sole traders enjoy greater flexibility when it comes to management and generally operate with fewer legal controls than companies, partnerships, or trusts. However, they have less flexibility with tax affairs, and there is no income-splitting option like there is with partnership, company and trust setups. 


4. Do you want to keep admin and reporting simple? 


If you’re considering a trust or company, the administrative and reporting requirements are more cumbersome than with a simpler sole trader set up. 


5. How do you feel about accepting full liability? 


Sole traders retain all the profits from the business (unlike with a partnership, trust or company) but they’re also responsible for all debts. This can increase the pressures of running the business, and even threaten your home and other personal assets if the business isn’t doing well financially. 


Companies are more complicated and expensive to set up, but you won’t be solely responsible for debts incurred. Only the assets of the Company will be at risk, however it is possible for a director’s personal assets to be at risk if they are found to have acted negligently. 


6. Will you need to raise capital? 


“Capital raising” is when a company asks for money from investors. This money might be used for funding, expanding, or acquiring something. As a company, trust, or partnership, it’s relatively easy to raise capital. However, this becomes much more difficult as a sole trader (and usually isn’t necessary anyway), so you will generally have to rely on savings, home equity or family loans. 


7. How much control do you want in the business? 


As a sole trader, you have total control over all business decisions. As a partnership, trust, or company, decision-making must be a shared responsibility. It’s not uncommon for business owners to start as a sole trader and then evolve into a more complex structure over time — and the business owner struggles to relinquish control. This causes tension within the company, trust, or partnership. While some business owners want full control, others enjoy knowing that responsibilities are divided and shared. So, what resonates better with you? 


So, what happens if you choose the wrong business structure? 


It’s annoying, but it’s not the end of the world. You can change your business structure if your circumstances change or if you think you’ve made the wrong decision. However, obviously it pays to opt for the most suitable structure from the start, which is why we suggest engaging a third party to help you with your decision. Changing from sole trader to another structure is relatively simple but changing from a partnership, company, or trust is more complicated. 


Get expert advice before you start your business.

Always seek specialist advice before making your final decision. If you want to chat through your options, contact Ascent Accountants today. We specialise in business set up and know the different business structures inside-and-out. We’ll be happy to talk through your options, go over the pros and cons of each, and help you land on the best structure for your business needs. We also do it while considering any business growth plans, so your business is set up for success now and in the future. 

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5 Things You Might Be Forgetting to Do That Could Save You Money

October 13, 2026
When you're looking for ways to save money, it's easy to focus on the big expenses.  But sometimes the easiest savings are sitting in the things you pay for every month without really thinking about them. Subscriptions, unused services and small recurring expenses can quietly add up over time. Here are five simple things worth checking. 1. Audit Your Subscriptions Start by looking at all the subscriptions you're currently paying for. Go through your Apple App Store or Google Play Store accounts and check what you're being charged for each month. You may find subscriptions you've forgotten about, apps you no longer use or services that are automatically renewing. Even a few dollars here and there can add up to a significant annual expense. 2. Cancel Services You Don't Use If you've paid for a service that you haven't used in the past month, ask yourself whether you really need it. Unused streaming services, apps, memberships and other recurring payments can continue taking money from your account long after you've stopped using them. Cancelling an unnecessary subscription is one of the easiest ways to stop the leakage. 3. Negotiate Better Deals If you've been with the same provider for a long time, don't assume you're already getting the best deal. It may be worth contacting your provider and asking whether there is a better plan or rate available. This could apply to a range of services where you're a long-term customer. A few minutes spent asking the question could result in ongoing savings. 4. Set Reminders for Renewals Free trials and annual subscriptions can be easy to forget about. Set a reminder for when a free trial ends or when a subscription is due to renew. That gives you the opportunity to decide whether you still want the service before you're charged again. Your calendar or phone can prompt you. 5. Track Your Spending Small expenses are easy to overlook when they're spread across multiple accounts and services. Using a budgeting app or regularly reviewing your transactions can help identify areas where you're spending more than you realise. You may discover recurring payments or habits that no longer represent good value. Small Changes Can Add Up Saving money doesn't always require a major lifestyle change. Sometimes it's simply about paying attention to where your money is going and cutting expenses you no longer need. The article provided makes the same point: regularly reviewing subscriptions and cutting back on unnecessary expenses can help build a stronger financial foundation. saving costs things to look at At Ascent Accountants, we can help you look at the bigger picture of your finances and identify opportunities to make your money work harder for you.

Buying Property? What Does an Unexpected Caveat Mean?

October 13, 2026
Finding a caveat on a property you're looking to buy can be an unwelcome surprise. A caveat can prevent certain dealings with a property from being registered, which can delay a sale or prevent a purchaser from settling until the issue has been dealt with. It can also create problems with finance because lenders generally require clear title. First, What Is a Caveat? A caveat is a legal notice recorded against a property. Importantly, a caveat may only be lodged by a person or entity with a legal or equitable proprietary interest in the land. It effectively acts as a statutory injunction, preventing the Registrar of Titles from registering certain dealings with the property, such as transfers, mortgages or leases, unless the caveat is withdrawn, removed by court order or otherwise lapses. caveat on properties Why Might a Caveat Be Lodged? There are several reasons why a caveat may be placed on a property. These can include securing a debt owed by the borrower, protecting a buyer's equitable interest in land under a contract of sale, or protecting an unregistered or equitable mortgage. A caveat can therefore indicate that another party has an interest in the property that needs to be resolved. How Can a Caveat Affect a Property Purchase? If you're buying a property with a caveat on the title, it can complicate the transaction. For example, the sale may be delayed or prevented from proceeding until the caveat has been dealt with. It can also affect finance. Lenders generally require clear title, so an unresolved caveat may make it difficult to obtain or finalise finance. What Should You Look Out For? If a caveat appears on a property, you're considering buying, don't simply assume it will disappear before settlement. Find out: Why the caveat has been lodged. Who has lodged it. What interest the caveator is claiming. Whether the caveat needs to be withdrawn or formally removed. Whether it could affect your ability to settle or obtain finance. The type of caveat matters too. The source material identifies different types, including absolute caveats, subject-to-claim caveats, caveats lodged after notice, improper dealing with caveats and registered proprietor's caveats. caveat on properties How Is a Caveat Removed? There are several possible ways of dealing with a caveat, depending on the circumstances. These can include withdrawal by the caveator, statutory removal or court resolution. A withdrawal generally needs to be signed by the caveator and lodged electronically where required. There is also a process for applying for removal under section 138B of the Transfer of Land Act 1893. caveat on properties The caveator has 21 days after being served with the relevant notice to act, although the Supreme Court may order an extension in some circumstances. Don't Let a Caveat Catch You by Surprise If you're buying or selling property, understanding what is recorded on the title is an important part of the process.  An unexpected caveat doesn't necessarily mean a property deal can't proceed, but it does mean there is an issue that needs to be understood and dealt with. At Ascent Property Co, we can help you understand the financial implications of a property transaction and work alongside your legal advisers to help you make informed decisions.

Car Logbooks: 8 ATO Audit Traps You Need to Avoid

October 13, 2026
Are you using the logbook method to claim car expenses? The ATO has been increasing its audit focus on car expense claims, with particular attention being paid to both whether logbooks meet the requirements, and if the business-use percentage has been calculated correctly. Here are eight common areas that could cause potential issues with your claim. 1. Keeping a logbook in the wrong income year A valid logbook must be kept in the first income year in which you use the logbook method to claim car expenses. After that, a new logbook is generally required every five years. If you're not sure whether your current logbook is still valid, it's worth checking before relying on it for your tax return. 2. Not keeping the logbook for the full 12 weeks A valid logbook needs to cover a continuous period of at least 12 weeks. The 12-week period can cross from one income year into another, provided it includes part of the relevant income year. 3. Choosing your busiest 12 weeks It can be tempting to choose a 12-week period when you were doing more business driving than usual. But the business-use percentage from a 12-week logbook isn't automatically the percentage you can apply for the entire year. Your calculation needs to consider variations in how the car was used throughout the year. 4. Forgetting about a replacement car If you replace your car during the income year, you can't simply transfer your existing logbook to the new vehicle due to changes in usage. If you want to rely on the existing logbook for the replacement car, there are nomination requirements that need to be met. Otherwise, a new logbook may be required. 5. Writing vague descriptions of business trips The details matter. A logbook needs to record the relevant details of each business journey, including the dates, odometer readings, kilometres travelled and the purpose of the journey. Entries such as "business trip", "client visit" or "customer visit" may not be enough . The description should explain why the journey was made. 6. Reconstructing your logbook later Your logbook should be kept as you make the journeys, or as soon as possible afterwards. Inconsistent entries, duplicated dates, identical odometer readings or records that don't line up with other information can raise questions about whether the logbook was reconstructed from memory. 7. Getting business and private kilometres wrong Your business-use percentage needs to be based on a reasonable estimate of your business kilometres for the year. That means considering changes in your work, holidays, leave, changes in employment duties, changes in your work location and other variations in how the vehicle was used. 8. Forgetting your odometer records and receipts A logbook is only part of the record-keeping requirements. You also need odometer records for the relevant period, and car expenses such as registration, insurance and servicing generally need to be supported by appropriate records. What Should You Do?  If you use the logbook method, don't assume that having a 12-week logbook automatically makes your claim correct and compliant. The ATO's increased scrutiny means it's important to make sure your logbook is valid, your entries are accurate and your business-use percentage reflects how the vehicle was used throughout the year. At Ascent Accountants, we can help you review your car expense records and make sure your logbook and business-use calculation meet the requirements before you claim.

In Your 50s? 10 Ways to Give Your Super a Boost Before Retirement

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In your 50s and thinking about retirement? Discover 10 practical strategies to boost your super and get your retirement savings on track.

Buying Your First Home? 5 Government Schemes Worth Knowing About

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Buying your first home? From deposit schemes to stamp duty concessions, here are 5 government schemes that could help you get into the market sooner.

The New $1,000 Work-Related Deduction: What Does It Mean for Your 2027 Tax Return?

September 14, 2026
A new way to claim work-related expenses is coming for the 2027 tax return — but there is an important catch. From 1 July 2026, eligible taxpayers can claim a standard deduction of up to $1,000 for certain work-related expenses, without having to substantiate each expense individually. Sounds simple enough. But before you assume you can claim $1,000 on top of everything else, there are a few things you need to know. The $1,000 Is the Maximum The new standard deduction is capped at $1,000. It is designed to cover certain common work-related expenses, such as work-related phone and internet, home office expenses, stationery and some travel expenses. You can't claim the $1,000 and then claim those same expenses again separately. If you have actual work-related expenses of more than $1,000, you can continue to claim your actual expenses under the existing rules, provided you meet the requirements and have the records to support them. Do I Still Need to Keep My Receipts? Yes: and this is where it is worth being organised. If you use the standard deduction, you don't need to substantiate the individual expenses covered by it. But if you think your actual work-related expenses could be more than $1,000, keeping your receipts and records throughout the year will allow you to claim your actual expenses instead. There are also some deductions that aren't covered by the standard deduction and can still be claimed separately if you are eligible. It's for Your 2027 Tax Return The new deduction applies from the 2026–27 financial year, so you won't use it for the tax return you are preparing now. It will first apply to your 2027 tax return, lodged from July 2027. Is the $1,000 a $1,000 Tax Refund? No. The $1,000 is a deduction from your taxable income. It doesn't mean you'll receive an extra $1,000 back from the ATO. The value of the deduction will depend on your individual tax circumstances. What Should You Do Now? The best thing you can do is keep track of your work-related expenses throughout the 2026–27 financial year. When it comes time to prepare your 2027 tax return, we can look at your circumstances and determine whether the standard deduction or claiming your actual expenses is likely to give you the better outcome.  At Ascent Accountants, we can help you make sense of the new rules and make sure you're claiming the deductions you're entitled to: without claiming the same expense twice!
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