Business Structure & Setup Advice

Name: Perth Tax Professionals
Address: Suite 15, 1st Floor, Morley Commercial Centre, 222-230 Walter Rd West, Morley, AU, 6062, AU
Telephone: +61 8 9375 9252

The wrong structure quietly taxes you for years. Let us get yours right before it does. Book your business structure review today.

Why Your Business Structure Matters

Choosing a business structure can feel like a gamble made before you know the rules. It should not be. The setup you land on decides how much tax you pay, who is liable when a debt is called in, how income reaches your family, and whether a lender or a buyer will trust the business later. Get it right and the hard parts of growing feel lighter. Get it wrong and you can overpay tax, expose the family home, and pay a second time to undo it.

Structure reaches further than most owners expect. It steers how the business passes to the next generation, how the small business CGT concessions apply the day you sell, and even whether your superannuation could one day hold your business premises. We give business structure advice shaped to your circumstances and your timeline, never a template.

The Four Main Business Structures In Australia

Most Australian businesses run under one of four common structures, and each carries its own tax consequences, ongoing costs, and level of protection.

Sole Trader

This is where most people begin. Cheap to start, quick to register, and run off your individual tax file number, with business income taxed at your personal marginal rate. The catch is exposure. You and the business are one and the same at law, so unlimited liability places your personal assets behind every business debt. One nuance many consultants miss: where most of your income flows from your own labour, the Personal Services Income rules can limit your deductions whatever structure you use. Around 30% of Australian businesses accept the sole trader trade off, as of June 2025.

Partnership

Two or more people, one shared venture. Partners split income and losses, and each reports their share on their own return. The law does not require a formal partnership agreement, yet going without one is how strong friendships and profitable businesses quietly unravel, often at the worst possible moment. Liability still reaches partners personally, so protection deserves as much attention as the profit split. A partnership also holds its own tax file number and lodges a partnership return, even though the partners ultimately pay the tax.

Company

A company stands apart from its owners as a separate legal entity, and that separation is the whole point. It shields personal assets from business debts and caps exposure through limited liability, while base rate entities pay a flat 25%, often well below personal rates. The trade off is administration and a few traps. Drawing money out is not a simple transfer, because Division 7A can treat a loan to yourself as a taxable dividend, and you report to the Australian Securities and Investments Commission every year. Companies make up around 44% of registered Australian businesses.

Trust

A trust, most often a discretionary trust, holds assets for its beneficiaries and gives you real say over who receives what. Governed by a trust deed and usually run through a corporate trustee, it can spread profits across family members and reinforce asset protection at once. It also becomes a quiet succession tool, letting a business move to the next generation without a forced sale. The trade offs are cost and discipline. Trusts are dearer to establish and run, undistributed income is taxed at the top marginal rate, and a family trust election is sometimes needed to pass losses or franking credits through cleanly. Trusts account for close to 18% of registered businesses.

Other forms exist as well. A co-operative, owned by at least five members and run democratically for their benefit, suits certain community and grower ventures. When one genuinely fits, we will tell you.

Restructuring As Your Business Grows

Few businesses keep one structure for life, and few should. Restructuring as a business grows is ordinary in Australia. Many owners open as a sole trader, then step up to a company or trust once profits rise, staff come aboard, or the risk grows too large to carry alone. Crossing the Western Australian payroll tax threshold, currently $1 million in annual wages, is one common trigger that brings fresh obligations through RevenueWA.

We manage the move from end to end. Registering the new entity, opening a separate bank account, transferring the business name, setting up Single Touch Payroll, and updating workers compensation insurance and payroll tax registrations, each step handled for you. If you want a second opinion first, the WA Small Business Development Corporation offers free guidance too. Sequence is everything, so we time the change to soften the tax consequences and keep transfer duty to a minimum.

How To Choose The Right Business Structure

The best structure for your neighbour may be wrong for you. It hinges on where you stand now and where you intend to go, so we work through four questions together.

Tax And Income Splitting

How much tax would each option truly cost? We run the figures, weighing income splitting across family members, the interaction with your other personal income, and where a modest salary plus retained company profit beats drawing everything at once.

Asset Protection And Liability

What happens if a supplier goes unpaid or a client sues? We measure how exposed your personal assets are and show how a company or trust can separate your business risk from your home, where a sole trader or general partnership leaves you personally liable for the lot.

Cost And Complexity

Every layer of protection brings paperwork. We weigh the benefit against the ongoing costs, since a sole trader carries minimal reporting requirements while a registered company or trust demands annual accounts, lodgements, Single Touch Payroll once you hire, and closer bookkeeping.

Growth And Exit Plans

Do you plan to raise capital, add owners, or sell down the track? The structure you choose now can unlock the small business CGT concessions and save real stamp duty later, or forfeit both if it is wrong. In Western Australia, transfer duty on moving assets between entities is assessed by RevenueWA under the Duties Act 2008, so the timing of any change carries a direct cost.

Client Success Story

By the time a Wangara online homewares seller reached out, her own success had started to work against her. Revenue had surged, but she was still trading as a sole trader, watching a growing slice of every dollar disappear into the top tax bracket while unpaid supplier invoices and a garage full of stock left her personal assets wide open. She was billing more each month, and worrying about it more too.

We rebuilt the business as a company owned by a discretionary trust. Limited liability now surrounds the trading, and profits flow to family beneficiaries rather than landing in one taxed lump. In the first full year, her tax bill fell by roughly a third, the family home sat safely outside the business, and the structure set her up to use the small business CGT concessions when she sells. These days she plans for growth instead of bracing for the next bill.

Why Choose Us For Business Structure Advice

Setting up and reshaping structures is not a once in a while task for us. It is weekly work across first time founders and long established operators, and that constant exposure means we notice the tax and liability issues generic checklists overlook.

We deal in specifics rather than theory. You see the tax consequences of each path in real figures, we complete every registration with ASIC and the ATO, and we connect your structure to our sole trader, company tax, trust, and partnership services. One team holds your entire position in view, from the first lodgement through to the eventual sale.

Frequently Asked Questions

These are the questions Perth business owners ask us most about choosing a structure.

What Are The Four Main Business Structures?

Sole trader, partnership, company, and trust, with a co-operative as a fifth for member owned ventures. We set them side by side against your goals and help you settle on the one that suits your circumstances and your plans to grow.

Which Structure Pays The Least Tax?

It varies with your income and aims. Companies pay 25% as base rate entities, sole traders and partners pay personal rates, and a trust adds flexibility through income distribution. We model your real numbers, including how you will draw money out, before you commit.

Can I Change My Business Structure Later?

Yes, and plenty of businesses do as they scale. We plan the switch to manage tax consequences, small business rollovers, and any transfer duty through RevenueWA, then handle the registrations so the change lands cleanly.

Do I Need A Company To Protect My Personal Assets?

Not always. A company or trust does provide limited liability that a sole trader or general partnership cannot. We assess your genuine risk and recommend only the protection that suits it.

How Much Does It Cost To Set Up A Structure?

It spans a wide range, from an inexpensive sole trader registration to the heavier setup and yearly costs of a company or trust. We put both figures in front of you before you decide, so nothing arrives as a surprise.

Build Your Business On A Structure That Fits

The choice you make today reaches into every tax return, every risk you shoulder, and every growth or exit decision for years ahead. You should not lie awake wondering whether your setup is quietly costing you. Once it is right, you can stop thinking about it and get back to the work you started the business to do.

With advice built around your situation, we help you launch or restructure knowing your assets are protected and your tax sits as low as the law allows. Whether you are starting fresh or fixing a setup that no longer suits you, call our Perth team on (08) 9375 9252 or email reception@perthtaxpro.com to book your business structure review today.