Accounting & tax — Structuring
Business Structure Advice
Sole trader, partnership, company or trust — and the combinations in between. We help you weigh the tax, asset-protection, succession, compliance-cost and lending implications so you can choose your structure with clear information. General issue-spotting, not personal legal advice.
- Sole trader
- Partnership
- Company
- Discretionary trust
- Group structures
Eternity Group Accountants is a registered tax agent (TPB 25523469). Information on this page is general in nature and does not constitute personal tax advice. Before acting, consider whether the information is appropriate to your circumstances and seek advice from a qualified tax professional.
Who this is for
When the structure question actually matters.
Choosing a structure is not a one-time form-filling exercise. It shapes how much tax you pay, what happens if the business is sued, how easily you can bring in a partner or sell, and how a lender reads your income. These are the moments it pays to think it through.
Starting a new business
You are about to register and want to start in the right vehicle rather than defaulting to a sole trader ABN and unwinding it later. We map the realistic options against your expected income, risk and growth plans.
Profits have outgrown your structure
Income has jumped and you are now paying high marginal rates on profit you are reinvesting. A company or trust may change how that profit is taxed — but the answer depends on your full circumstances, not a rule of thumb.
Bringing in a partner or investor
A second owner, a family member, or an external investor changes everything — income splitting, control, exit rights and liability. The structure needs to reflect who owns what and what happens if someone leaves.
Real liability or lending plans
You are taking on staff, signing leases, carrying professional risk, or planning to borrow against the business or property. Asset protection and how lenders assess each entity become front-of-mind.
For a side-by-side written comparison of the two structures people ask about most, read our plain-English company vs trust guide. This service goes further: it considers your actual numbers, your risk, and your lending plans rather than the structures in the abstract.
What we weigh
The five lenses we apply to every structure.
A structure is a trade-off across competing priorities. Optimising for tax alone can leave you exposed; optimising for protection alone can cost more than it saves. We work through each lens and show you where they pull in different directions.
Tax treatment
Rates · flexibility · timing
How profit is taxed in each vehicle — individual marginal rates for sole traders and partners, the company rate on retained company profit, and the flow-through flexibility of a trust. We also flag the 50% CGT discount, which companies do not access, and the personal services income rules that can override the lot.
Asset protection
Separating risk from personal wealth
How far each structure separates business risk from your home and savings — and the limits, including director penalty notices, personal guarantees and insolvent-trading exposure. Protection is a layer, not a guarantee, and it has to be backed by clean governance.
Succession & exit
Bringing people in, handing it on, selling
How easily ownership can change hands. Trusts and companies can admit new owners or pass to the next generation without selling the underlying business; a sole trader cannot. We consider buy-sell terms, control on death, and which structures preserve small-business CGT concessions on sale.
Compliance cost
What it costs to run each year
The ongoing reality — ASIC fees, separate returns, financial statements, annual trust resolutions and the bookkeeping discipline each entity demands. A structure only makes sense if its benefits clearly outweigh what it costs to keep compliant year after year.
Lending implications
How a lender reads each entity
How your structure changes a loan assessment — what income evidence applies, how distributions and retained profits are treated, and how many years of figures a lender wants. Approval always depends on the lender’s assessment, lending criteria and your circumstances, but a structure that is messy to evidence makes borrowing harder.
Combinations & groups
When one entity is not enough
Many established businesses run a trading entity, a holding entity, and sometimes a bucket company together. We map how the pieces interact — Division 7A on loans and unpaid present entitlements, franking, and inter-entity transactions — so the group stays clean rather than accumulating hidden problems.
Why one roof helps
Structure decisions touch tax and lending at the same time.
The structure that looks cleanest for tax is not always the one that borrows most easily, and the reverse is also true. A trust can spread income tax-effectively yet make a home-loan assessment slower because the lender wants to see distributions and trust financials. A company can cap the rate on retained profit but leave less personal income for a serviceability calculation. Because Eternity Group covers both accounting and mortgage broking, the same practitioner who frames the tax position can also see how a lender will read it — so you understand the lending trade-off before you commit, not after. If the structure will be used for borrowing, our trust and company borrower document checklist sets out the documents lenders typically review.
For property investors specifically, the entity that holds the asset, the way the loan is structured and interest deductibility all interact. Our accounting and lending structure for property investors page covers that intersection in detail. For owners who want a forward-looking review before year-end, see tax planning for business owners, which works on the figures inside whatever structure you land on.
Common traps
What to watch with business structures.
Most structuring problems are not exotic — they come from setting up the wrong vehicle for convenience, then living with the consequences. These are the issues we see most often.
Defaulting to a sole trader
Registering a sole trader ABN because it is quick, then carrying real liability and high-rate tax for years. The convenient start can be the expensive one once profit or risk grows.
Trust distributions left too late
A discretionary trust must resolve who receives income before 30 June each year. Miss the resolution and the trustee can be taxed at the top rate — an avoidable cost that catches busy owners every year.
Division 7A surprises
Drawing money out of a company or via an unpaid present entitlement without a complying loan can create a deemed dividend taxable in your hands. Loan accounts and entitlements need tracking, not guessing.
Restructuring without planning the tax
Moving a business or asset between entities can trigger CGT, stamp duty and GST. Rollover relief may help where the conditions are met, but it is technical — change the structure deliberately, not on a whim.
Personal guarantees undoing protection
Lenders and landlords usually require directors to personally guarantee debts and leases, which can pierce the very protection the company or trust was meant to give. Know what you have actually signed.
A structure nobody maintains
A company or trust that is set up and then neglected — no resolutions, messy loan accounts, mingled funds — can be treated as a sham and offers little protection. The structure only works if it is run properly.
How it works
From question to a clear decision you can act on.
A structured review, not a sales pitch. You leave understanding the realistic options, the trade-offs, and what any change would cost — so the decision is yours to make with confidence.
Scoping conversation
We map where you are now — current structure, income, who is involved, your risk exposure, and any lending or sale plans on the horizon. The fixed fee for the review is confirmed before we start.
Position analysis
We run your actual numbers through each candidate structure, applying the five lenses — tax, asset protection, succession, compliance cost and lending — so the comparison is grounded, not generic.
Issue-spotting & flags
We surface the technical issues your situation raises: CGT on any restructure, Division 7A, trust distribution rules, personal services income, and where a solicitor needs to be involved.
Options summary
You receive a plain-English summary of the realistic options, the trade-offs between them, and our view on fit — clearly framed as general information, not personal legal or financial-product advice.
Decide & coordinate
If you proceed, we coordinate the entity set-up, ABN, TFN and tax registrations, and work alongside your solicitor on the trust deed, constitution or shareholder agreement.
Ongoing review
Structure is not set-and-forget. As your profit, people or plans change, we revisit whether the current setup still fits — and flag any change deliberately rather than in a crisis.
Frequently asked questions
Business structures — common questions.
There is no single best structure. The right answer depends on your income level, who else is involved, how much asset-protection risk you carry, whether you plan to reinvest or draw profits, and your exit horizon. A sole trader is simple and cheap but offers no separation from personal assets. A company caps the tax rate on retained profits and limits liability. A discretionary trust gives flexibility over who receives income. Many established businesses use a combination. This is general information — your structure should be decided with advice for your specific situation.
This page is general information only and does not take account of your objectives or personal circumstances. It is not personal legal or tax structuring advice — your structure should be decided with advice for your situation, prepared by a registered tax agent (TPB 25523469) and, where legal documents are involved, a solicitor.
Related
Where structure connects
The structure decision feeds directly into how each entity is taxed, how the group is run, and how property and lending are arranged. These pages go deeper on each piece.
- Guide
Guide: company vs trust
A plain-English written comparison of the two structures people ask about most — tax treatment, the CGT discount, asset protection, losses and compliance cost. Start here for the side-by-side.
- Tax & Accounting
Company tax return
Once you operate through a company, this is the annual engagement — financial statements, the company return, franking account and Division 7A tracking.
- Tax & Accounting
Trust tax return
For a discretionary or unit trust, the return, distribution resolutions and beneficiary positions are prepared together so the structure stays compliant.
- Property Investors
Property investor structure & lending
Where the structure question is really about which entity holds the property and how the loan is arranged — accounting and lending considered together.
- Tax & Accounting
Tax planning for business owners
A forward-looking review before year-end that works on the figures inside whatever structure you choose — distributions, super and pre-30-June actions.
- Tax & Accounting
Accounting hub
See the full range of accounting and tax services, from individual returns to group structures and BAS.
- Business Services
Business structuring implementation
Once the structure is decided, the hands-on set-up — entity registration, ABN, TFN and GST, banking and software, with a clean handover.
- Mortgage Broking
Loans for trusts & companies
Borrowing where a family trust or company is the borrower — guarantor requirements and entity lending policy, scoped alongside the structure.
- Local
Get in touch
Book a structure review. We confirm fit, scope and a fixed fee before any engagement letter is signed.