Key points:
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When you start a business, you will choose a business structure. The structure reflects who owns the business and makes decisions about it.
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The most common business structures in Australia are sole trader, partnership, company and trust.
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The ASIC registers you need to be on depend on your business structure and the names you use when doing business.
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You may need to be on the business names register, the companies register, or both.
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You will have other obligations that are not related to ASIC.
Business structures and ASIC
There are 4 main structures you can choose for your business. Here are some brief descriptions of each. We also outline how some of the ASIC registers are relevant to them.
The structure you choose will also affect obligations and registrations that are not related to ASIC. For more detailed explanations and information on the best structure for your business, see Choose your business structure: business.gov.au
Sole trader
Sole trader is the simplest business structure. One person owns the business and makes the decisions. It’s straightforward to set up, and there are fewer compliance and legal obligations than for other structures.
Sole traders and ASIC registers
Business names register: A sole trader must be on the business names register if they conduct business under a name other than their personal name. For example, if Jake Smith wants to use the business name Gorgeous Bouquets, he must register it. If Jake just wants his business name to be Jake Smith, he does not have to register it.
Companies register: Sole traders are not companies, so are not on the companies register.
Partnership
A partnership is 2 or more people who do business together. They own the business and make decisions together. Partnerships are more complex to set up than sole trader businesses, but simpler than companies.
Partnerships and ASIC registers
Business names register: A partnership must be on the business names register if it does business under a name other than all the partners’ personal names. For example, if partners Peter Nguyen and Helen Lee want to conduct business under the business name N&L Plumbing, they must register it. If they want their business name to be Peter Nguyen and Helen Lee, they do not have to register it.
Companies register: Partnerships are not companies, so are not on the companies register.
Company
A company is a separate legal entity from the people who own and run it. This means it has the same rights as an individual. For example, it can incur debt, sue and be sued. The liability of a company is limited.
Companies are complex to set up, but this structure has benefits for some people.
Companies are owned by members (shareholders) and have officeholders who make key decisions.
Companies and ASIC registers
Business names register: Companies must be on the business names register if they do business under a name other than the company name. For example, if a company called Prospect Partners Pty Ltd wants to use the business name Bright Future Consulting Services, they must register it. If they want to conduct business under Prospect Partners Pty Ltd, they do not have to register it.
Companies register: All companies must be on the companies register, keep their registration details up to date and pay an annual fee.
Trust
A trust holds property or assets for the benefit of others (known as beneficiaries).
When a business is operated through a trust, the trustee is responsible for all aspects of its operation. The trustee can be a person or a company.
Trusts are complex and expensive to set up, requiring expert knowledge and skills.
Trusts and ASIC registers
Business names register: Trusts must be on the business names register if they conduct business under a name other than the trust name. For example, if a trust called The Smith and Brown Trust wants to conduct business under the business name Immaculate Cleaning Services, they must register it. If they want the business name to be The Smith and Brown Trust, they do not have to register it.
Companies register: Trusts are not companies, so are not on the companies register. However, if a trust has a company as trustee, that company must be on the companies register.
Source : ASIC
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