Business structures in Australia: sole trader, partnership and company, as business.gov.au and ASIC describe them

This page reports what the official source says. It is not legal advice: ask the office named here. The sources are the business.gov.au pages on business structures, run by the Australian Government, and the ASIC page on the four main structures, all read on October 9, 2026. They apply to any business and say nothing particular about tree work. The page says nothing about which structure suits any tree business. For the United States and the United Kingdom, see business structures in the United States and United Kingdom.

The four main structures

ASIC says that when you start a business you choose a structure, that the structure reflects who owns the business and makes decisions about it, and that the most common in Australia are sole trader, partnership, company and trust. It says the ASIC registers a business needs to be on depend on the structure and on the names it trades under.

Structure	What the official pages say
Sole trader	One person owns the business and makes the decisions. business.gov.au calls it the simplest and relatively inexpensive to set up, with unlimited liability: all personal assets are at risk if things go wrong
Partnership	Two or more people who manage the business and share income or losses. business.gov.au says it is relatively easy and inexpensive to set up, with minimal reporting
Company	A separate legal entity from the people who own and run it, with limited liability for members. business.gov.au calls it expensive and complicated to set up
Trust	ASIC says a trust holds property or assets for the benefit of others, and the trustee is responsible for all aspects of running the business. It calls trusts complex and expensive to set up

Sole trader

business.gov.au says a sole trader can use their individual tax file number to lodge tax returns and does not need a separate business bank account, although it recommends one. Financial records must be kept for at least 5 years. The page says a sole trader cannot split profits or losses with family members and is personally liable to pay tax on all the income. A sole trader can employ people, and the page names workers' compensation insurance and superannuation contributions as duties that come with employees. Paying super for oneself is a choice.

ASIC says a sole trader must be on the business names register when trading under any name other than their personal name. A sole trader is not a company and is not on the companies register.

Partnership

Partnerships are covered by the state and territory Partnership Acts, and this page restates none of that. The business.gov.au page on partnerships sets out the kinds, the registrations and the agreements.

Company

business.gov.au says a company has to comply with the Corporations Act 2001. Directors control the operations and shareholders own the business. The money the business earns belongs to the company. It lists these duties: lodge an annual company tax return with the Australian Taxation Office, complete an annual review and pay the review fee, make a yearly declaration of solvency, hold a director ID, and tell ASIC within 28 days of key changes to company details. The page says a company must register for GST at a turnover of AUD 75,000 or more and that directors can be held personally liable if found in breach of their legal obligations.

ASIC says all companies must be on the companies register, keep their details up to date and pay an annual fee. A company that trades under a name other than its own must also be on the business names register.

Sole trader and company side by side

Topic	Sole trader	Company
Tax return	Business income goes in the owner's own return; no separate business return	The company lodges its own tax return and keeps tax records for at least five years
Financial records	5 years	At least 7 years under the Corporations Act 2001
Taking money out	The money earned is the owner's individual income and can be withdrawn	A separate business bank account is mandatory; the company can pay wages or directors' fees but not personal drawings
Business debts	The owner is personally liable; no division between business and personal assets	The company is generally liable; a director is personally liable for pay as you go withholding and superannuation debts, even for the period served after ceasing as director

The same comparison page also lists registration fees, but it prints them without naming a year, so this page leaves the amounts out and points to the page itself.

Changing from sole trader to company

business.gov.au says a company has at least one shareholder and one director, and one person can be both. It lists three steps: register through the Business Registration Service, which covers the business name, company name, Australian Company Number and ABN in one place; transfer licences and assets, including trademarks, to the company; and cancel the sole trader ABN, which cannot be transferred. It says cancelling that ABN also cancels GST, luxury car tax, wine equalisation tax and fuel tax credit registrations. For the self-employed registration side, see registering as self-employed or a sole trader.