Business Structure Advice and Company and Trust Setup
Choose the right structure from the start, or fix one that no longer fits. Clear advice on sole traders, partnerships, companies and trusts, with the registrations handled for you.
Book a free 30-minute consultation
Getting your business structure right
The structure you trade through affects how much tax you pay, how well your personal assets are protected, how easily you can bring in partners or sell, and how much paperwork you have each year. Many small businesses start as sole traders because it is quick and simple, which is often the right choice. But as profits grow, staff are hired or assets build up, the original structure can start to cost money or leave you exposed. Mentor Tax & Advisory helps Sunshine Coast business owners choose, set up and review the structure that suits their circumstances now and where they want to be.
The main business structures
Sole trader
The simplest and cheapest structure. You trade under your own ABN, keep control of everything and report business income in your individual tax return. The trade-offs are that all profit is taxed at your personal marginal rates and you are personally liable for the debts of the business.
Partnership
Two or more people carrying on business together. The partnership lodges its own return but does not pay tax; each partner pays tax on their share of the profit. Partners are generally jointly liable for partnership debts, so a written partnership agreement is important.
Company
A company is a separate legal entity, registered with ASIC, that pays its own tax. For the 2025–26 income year the company tax rate is 25% for base rate entities and 30% otherwise. A company can limit personal liability, although directors still have legal duties and can be personally liable in some situations, such as for certain unpaid tax and super. Companies carry more compliance: an annual ASIC review, director obligations and careful handling of money taken out by the owners.
Discretionary (family) trust
A trustee runs the business for a group of beneficiaries, usually family members, and can decide each year how income is distributed among them. That flexibility can help with tax planning and asset protection, but trusts come with strict rules: trustee resolutions generally need to be made by 30 June, and distributions must be made properly. Our guide to family trusts explains how they work.
Unit trust
Beneficiaries hold fixed units, similar to shares, so each person's entitlement is set in advance. Unit trusts are often used when unrelated parties go into business or buy property together.
Corporate trustee
A trust needs a trustee, and many business owners use a company set up just for that role rather than acting as individual trustees. A corporate trustee can make it easier to separate the trust's assets from personal assets and to change who controls the trust over time.
Tax and asset protection considerations
There is no single best structure. When we advise, we look at your expected profit, who else in the family earns income, the risks of your industry, whether you hold valuable assets such as property, plans to bring in partners or investors, and how you might eventually sell or hand on the business. We also consider access to capital gains tax concessions, how losses are treated in each structure, and the ongoing cost of running it. You get a plain-English comparison of the options so you can make an informed decision.
Division 7A – taking money out of a company
A common trap for new company owners is treating the company bank account like their own. Under Division 7A, payments, loans and forgiven debts from a private company to shareholders or their associates can be treated as unfranked dividends and taxed in their hands. A loan can avoid this if it is repaid, or put under a complying written loan agreement, by the company's lodgment day. A complying loan must charge at least the benchmark interest rate – 8.77% for the year ending 30 June 2027 – run for no more than 7 years unsecured or 25 years secured over real property, and have minimum yearly repayments made by 30 June. We set up and monitor these loans so they do not catch you out.
Setting up your structure
Once you have decided, we coordinate the registrations so you can start trading properly:
- ABN for the business entity, and a TFN for any new company or trust.
- GST registration when your GST turnover reaches or is expected to reach $75,000, or earlier if it suits you. See our guide to BAS and GST basics.
- Company registration with ASIC, including the company's constitution, officeholders and share structure.
- Director ID. Every company director, including directors of a corporate trustee, needs a director ID, and you must apply before you are appointed. It is free, but you must apply yourself through Australian Business Registry Services – we can check what you need and guide you through it.
- Trust deeds arranged as part of the set-up, with the trust properly established and funded.
- Xero set up for the new entity, with bookkeeping and BAS ready to go from the first day.
Restructuring an existing business
If your business has outgrown its structure, moving assets to a new entity can normally trigger capital gains tax and other tax consequences. The small business restructure roll-over can allow active business assets to be transferred without an income tax liability, where the business's aggregated turnover is under $10 million, the transfer is part of a genuine restructure of an ongoing business, and ultimate economic ownership of the assets does not change. Stamp duty and GST still need to be considered separately. We review whether the roll-over or another option fits, and map out the steps before anything is transferred.
Why Mentor Tax & Advisory
- Qualified and registered. Blake Land holds a Bachelor of Commerce, is a member of AIPA and a Fellow of the NTAA, and is a Registered Tax Agent (TAN 25901938).
- 25+ years of experience, and more than 10 years advising Sunshine Coast businesses across all industries.
- Structure and tax together. We set up the entity and look after its tax returns, so the structure works the way it was intended. Our EOFY tax planning checklist covers the yearly decisions.
- Specialist areas, including SMSFs with corporate trustees and QBCC-licensed builders.
Sunshine Coast based, Australia-wide
We advise business owners in Noosa, Coolum Beach, Maroochydore, Mooloolaba, Buderim, Caloundra and Gympie, and anywhere in Australia online.
Book a free 30-minute consultation
Starting a business or wondering if your structure still fits? Business owners can book a free 30-minute consultation. Call Blake on 0400 074 846 or get in touch online.
Frequently asked questions
Should I start as a sole trader or set up a company?
It depends on your expected profit, the risks in your industry, whether you will have partners and how much admin you want. A sole trader structure is simple and cheap and suits many new businesses. A company can offer limited liability and a flat tax rate, but costs more to run and has stricter rules about taking money out. We compare the options using your numbers.
What is a corporate trustee and do I need one?
A corporate trustee is a company set up to act as the trustee of a trust, instead of individuals. It is not compulsory, but it can help keep trust assets separate from personal assets and makes changes of control simpler, for example when a trustee dies or steps away. Each director of the trustee company needs a director ID before being appointed.
Do I need a director ID?
Yes, if you will be a director of a company, including a company that acts as trustee of a family trust or SMSF. You must apply before you are appointed, and you only ever need one. Applying is free and is done through Australian Business Registry Services. You have to apply yourself, but we can confirm whether you need one and guide you through it.
Can I take money out of my company whenever I like?
Not without tax consequences. Under Division 7A, payments, loans and forgiven debts from a private company to shareholders or their associates can be treated as unfranked dividends. A loan can be protected by repaying it or putting a complying written loan agreement in place by the company's lodgment day, with interest of at least 8.77% for 2026–27 and minimum yearly repayments.
Can I move my business into a new structure without paying tax?
Possibly. The small business restructure roll-over can allow active business assets to be transferred to a new entity without an income tax liability, if aggregated turnover is under $10 million, it is a genuine restructure of an ongoing business, and ultimate economic ownership does not change. Stamp duty and GST must be considered separately, so get advice before transferring anything.
Is a family trust right for my business?
A discretionary trust can offer flexibility in distributing income among family members and some asset protection, but it adds cost and complexity. Trustee resolutions generally need to be made by 30 June each year, and distributions must follow the rules. Whether it suits you depends on your family, income and plans. Read our family trusts guide, then talk to us about your situation.