Ellco Group - Accountants & Advisors

Company, Trust, Partnership and Sole Trader Entities

Business Structures

Your business can be conducted under a number of different structures. We are very familiar with the strengths and weaknesses of each structure type.

From time to time you might like to change structure we can help with this process – we have even prepared a business structure guide to help you better under each type of entity.

Our guide can be obtained here: Ellco Group - Business Structures Guide.

Comparison Table

Sole Trader Partnership Company Unit Trust Discretionary
Separate Entity N/A No Yes No No
Establishment Documentation None Partnership agreement Constitution Trust Deed Trust Deed
Establishment Cost Low Medium High High High
Limited Liability No No Yes Can be if trustee company Can be if trustee company
Complexity Simple Simple Complex Complex Complex
Distribution of Losses Individual can use Partners can use Trapped in Company Trapped in Trust Trapped in Trust
Carry Forward Losses No restrictions No restrictions Continuity of ownership and same business test restrictions Compliance with trust loss rules Compliance with trust loss rules
Income Splitting No Limited Salaries or dividends but PSI rules may apply Salaries or dividends but PSI rules may apply Salaries or dividends but PSI rules may apply
Streaming of Income No No No Yes Yes
Interest deduction on return of capital N/A Yes Yes Yes Yes
50% CGT Discount Yes Yes No Yes Yes
Can principal be employed? No No Yes Yes Yes
Superannuation contributions Self employed Self employed Employer sponsored Employer sponsored Employer sponsored
Who registers for GST? Individuals Partnership Company Trust Trust
Who pays tax? Individuals Partners Company Beneficiary /Trustee Beneficiary /Trustee
Do principals have fixed interest Yes Yes Yes Yes No (in most cases)
Flexibility Inflexible Some flexibility Inflexible Some flexibility Flexible

Establishing a New Business Entity

Every day we establish business entities. Some useful quick links are:-

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