Best Business Structure Advice: Choosing the Right Setup for Your Business | Cantor Accounting North Sydney

 

Starting a business is exciting — but one of the most important decisions you’ll make early on is choosing the right business structure. The structure you select affects everything from taxes and liability to funding options and long-term growth. At Cantor Accounting, we specialise in helping entrepreneurs, startups, contractors and established businesses in North Sydney choose the structure that best aligns with their goals.

This guide will help you understand the main types of business structures in Australia and how to determine which one is right for you.

Why Business Structure Matters

Your business structure influences:

• How much tax you pay

• Your personal liability and asset protection

• How profits are distributed

• Compliance and reporting obligations

• Ability to raise capital

• Future business flexibility

Choosing the wrong structure can create tax inefficiencies, legal risks and unnecessary costs. That’s why professional advice is crucial — especially before you start trading.

Common Business Structures in Australia

1. Sole Trader

The simplest and most common structure for freelancers, tradies and small businesses.

Pros

• Easy and inexpensive to set up

• Full control of the business

• Simple tax reporting

Cons

• No asset protection — owner is personally liable

• Harder to scale

• Limited tax planning flexibility

Best for: Low-risk businesses, new entrepreneurs, contractors.

2. Partnership

Two or more people operate a business together.

Pros

• Shared responsibility

• Easy to form

• Low compliance costs

Cons

• Joint personal liability

• Potential disputes between partners

• Profit sharing may limit income

Best for: Family businesses, professional partnerships, small groups of founders.

3. Company (Pty Ltd)

A company is a separate legal entity — offering stronger asset protection and tax advantages.

Pros

• Limited liability

• Full asset protection

• Lower tax rate (currently 25% for base rate entities)

• Access to dividends and flexible tax planning

• Attractive for investors

Cons

• Higher compliance and reporting requirements

• Setup costs are higher

Best for: Growing businesses, startups, online businesses, trades, professional services and companies looking to scale.

4. Trust (Discretionary or Unit Trust)

A trust holds assets or runs a business on behalf of beneficiaries.

Pros

• Excellent tax planning flexibility

• Strong asset protection

• Ideal for family businesses and investment structures

Cons

• More complex

• Must follow strict trust rules

• Higher ongoing administrative costs

Best for: Investment businesses, asset protection strategies, family enterprises.

Which Business Structure Is Best?

The best structure depends on your:

• Risk level

• Income expectations

• Growth plans

• Industry type

• Number of owners

• Personal asset protection needs

For example:

• A tradie starting out may begin as a sole trader but later transition to a company as income grows.

• A family business may benefit from a trust structure for flexibility and asset protection.

• A scalable startup will typically choose a company structure for liability protection and funding opportunities.

How Cantor Accounting Helps You Choose the Right Structure

At Cantor Accounting, we offer customised, practical and strategic advice to ensure your business starts on a solid foundation.

Our Business Structure Advisory Includes:

• Assessing your short-term and long-term goals

• Reviewing your risk exposure and asset protection requirements

• Analysing tax efficiency for each structure

• Setting up ABN, TFN, GST and PAYG if required

• Registering companies and trusts

• Providing ongoing bookkeeping, tax and compliance support

Our goal is to simplify the process and help you make the smartest financial decision for your business.

Common Mistakes to Avoid When Choosing a Business Structure Advice

• Choosing the cheapest structure instead of the most effective one

• Not considering long-term tax implications

• Operating as a sole trader when turnover starts increasing

• Setting up a company without understanding director responsibilities

• Not reviewing structure as the business grows

We help you avoid these pitfalls with expert, tailored advice.

Final Thoughts

The right business structure advice can save you tax, protect your assets and support long-term business success. The wrong one can cost you thousands. That’s why working with professionals like Cantor Accounting ensures you make informed, strategic decisions from day one.

Whether you're starting a new business or reviewing your current structure, our team is here to help.