What is the difference between a Chartered Accountant and a regular accountant in Australia?

A Chartered Accountant (CA) has completed additional postgraduate training and practical experience beyond a standard accounting degree, and is credentialled by Chartered Accountants ANZ. This qualifies them to handle complex financial matters including tax planning, business structuring, SMSF auditing, and financial advisory work. A regular or general accountant holds a degree but typically does not hold the CA designation. At Verus, all our principals are Chartered Accountants, which means you receive specialist-level advice rather than generalist bookkeeping. This matters when your financial decisions have lasting tax or structural implications for your business or personal wealth.

How much does a tax accountant cost in Sydney?

The cost of a tax accountant in Sydney varies based on the complexity of your return and the services required. For a straightforward individual tax return, fees typically range from $150 to $400. For business tax returns (company, trust, or partnership), fees generally start from $500 and can rise significantly depending on the volume of transactions, payroll, and additional compliance work involved. At Verus, we offer transparent, fixed-fee pricing and a free initial consultation so you know exactly what to expect before you commit. Engaging a registered tax accountant rather than lodging yourself often saves more in deductions and maximises your return compared to the cost of the service.

What business structure should I choose when setting up a company in Australia?

Choosing the right business structure in Australia is one of the most important decisions you will make, as it affects your tax obligations, personal liability, and ability to grow. The four main options are: Sole Trader (simplest, lowest cost, but no liability protection), Partnership (shared ownership, each partner liable), Company (separate legal entity, limited liability, higher compliance costs), and Trust (flexible for asset protection and income distribution, but more complex to manage). For most SMEs and growing businesses, a company or discretionary trust structure offers the best balance of asset protection and tax efficiency. The right choice depends on your revenue, industry, number of owners, and long-term goals. Our chartered accountants at Verus can walk you through all options in a free consultation and set up the structure that works for you.

What is an SMSF and how do I know if one is right for me?

A Self-Managed Super Fund (SMSF) is a private superannuation fund you manage yourself, giving you direct control over how your retirement savings are invested. Unlike retail or industry super funds, an SMSF allows you to invest in a broader range of assets, including residential and commercial property, shares, and term deposits. An SMSF is generally worth considering if you have a combined super balance of at least $200,000 to $300,000, a long-term investment strategy, and the time to meet your trustee obligations. The ATO requires SMSFs to be audited annually and to comply with strict reporting rules. At Verus, our SMSF accountants manage the full setup, ongoing compliance, and annual audit requirements, so you can focus on building your retirement wealth without the administrative burden.

What is the difference between Xero and MYOB, and which is better for my business?

Both Xero and MYOB are leading cloud-based accounting platforms in Australia, but they suit different business needs. Xero is generally preferred by small businesses and startups for its clean interface, strong third-party app integrations, and real-time bank feeds. MYOB tends to suit businesses with more complex payroll requirements, multiple entities, or those that prefer a locally developed platform with strong ATO integration. At Verus, we are certified Xero Advisors and MYOB Partners, meaning we can implement, optimise, or migrate your accounting software regardless of which platform you use. Our team will assess your business size, payroll complexity, and reporting needs to recommend the right fit, so you are not paying for features you do not need.

What is a virtual CFO and does my small business need one?

A virtual CFO (vCFO) is an outsourced financial expert who performs the strategic functions of a Chief Financial Officer without the cost of a full-time executive hire. For small and medium businesses that need high-level financial planning, cash flow management, KPI tracking, and strategic advice but cannot justify a full-time CFO salary, a virtual CFO service fills that gap. At Verus, our virtual CFO service is available on demand, giving business owners access to strategic financial guidance when they need it most, whether that is during rapid growth, a restructure, a funding round, or when navigating a complex tax position. If you are a growing SME spending more time on financial decisions than on your core business, a virtual CFO is likely worth considering.

How can I legally reduce my business tax in Australia?

There are several legal strategies Australian business owners can use to reduce their tax liability. These include: choosing the right business structure (companies and trusts can offer significant tax advantages over sole traders); making pre-tax superannuation contributions; timing income and expenses around financial year end to manage taxable income; claiming all eligible deductions including home office, vehicle, equipment, and professional development costs; using small business tax concessions such as the instant asset write-off; and ensuring your business is split across family members or entities where appropriate. Tax minimisation is a specialist area and the rules change regularly with ATO updates and Federal Budgets. At Verus, our chartered accountants provide proactive tax planning as part of our annual service, not just at lodgement time, so you are always positioned to pay what you owe, and nothing more.

What is financial modelling and why does my business need it?

Financial modelling is the process of building a structured representation of a business's financial performance, typically in a spreadsheet or financial tool, to forecast future outcomes and support decision-making. A good financial model lets you test scenarios, for example what happens to your cash flow if revenue drops 20%, or whether you can afford to hire two more staff in the next quarter, before committing real money. Businesses commonly use financial models for raising investment, applying for finance, planning acquisitions, and managing cash flow through growth periods. At Verus, our financial modelling service goes beyond spreadsheets. We combine accounting expertise with strategic insight to build models that are commercially relevant, clearly presented, and designed to hold up under scrutiny from investors and lenders.

Do I need an accountant to set up a company in Australia?

Technically, you do not legally require an accountant to register a company in Australia. You can register directly through ASIC and set up an ABN through the Australian Business Register yourself. However, the registration step is only a small part of setting up a business correctly. Most business owners who go it alone without professional advice end up choosing the wrong structure, missing key compliance obligations (payroll, BAS, ASIC annual reviews), or setting up their books in a way that costs more to fix later. An accountant ensures your structure is right from day one for your tax position, liability protection, and growth plans. At Verus, we handle the full setup process for companies, trusts, and SMSFs, including ASIC registration, ABN and ACN applications, and accounting software implementation, so nothing falls through the cracks.

What is the difference between a bookkeeper and an accountant in Australia?

A bookkeeper manages the day-to-day recording of financial transactions, including invoicing, payroll, bank reconciliation, BAS preparation, and accounts payable and receivable. An accountant takes this data and uses it to prepare financial statements, lodge tax returns, provide tax advice, and guide broader business strategy. Many businesses need both. In practice, a bookkeeper ensures your records are accurate and up to date, while an accountant interprets that data to minimise tax, support growth decisions, and meet compliance obligations. At Verus, we provide both services under one roof. Our bookkeeping team works in Xero, MYOB, and Reckon, and our chartered accountants use that clean data to deliver accurate reporting, strategic tax advice, and business advisory support tailored to your goals.

Sole Trader vs Company vs Trust: Which Business Structure Is Right for You in Australia?

Quick Summary

Your business structure affects how much tax you pay, how well your assets are protected, and how easily you can grow or exit. Most Australians start as a sole trader and stay there longer than they should. This guide gives you a plain-English comparison of sole trader vs company in Australia, and where a trust fits in, so you can make the right call for your situation.

Business Structure & Tax Planning
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14 May 2026
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10 min read

Comparison of sole trader, company and trust business structures in Australia

Choosing the right business structure is one of the most impactful financial decisions an Australian business owner can make.

Why Your Business Structure Matters More Than Most People Think

The business structure you choose is not a technicality. It directly determines your personal tax rate, your personal liability if something goes wrong, how income can be split with family members, whether you can access CGT concessions on sale, and the compliance costs you carry every year.

Most people choose a structure based on what is easiest at setup, not what is optimal for where they are headed. That is fine at $50k revenue. At $300k or $1 million, the wrong structure can cost tens of thousands in avoidable tax annually.

Official Reference: The Australian Taxation Office provides guidance on business structures at ato.gov.au. If you are registering for the first time, the ATO’s overview is a useful starting point before speaking with an accountant.

If you are in the early stages, our Business Setup Services can help you get the right foundations in place from day one.

Sole Trader in Australia: Simple to Start, Limited to Scale

A sole trader is the simplest business structure in Australia. You operate under your own name (or a registered business name), and all business income flows directly to you as personal income. There is no separation between you and the business.

Pros

Cheapest and simplest to set up
Minimal compliance obligations
Direct access to all income
No separate tax return required
Losses can offset personal income

Cons

Unlimited personal liability
Taxed at personal marginal rates (up to 47%)
No income splitting with family
Limited CGT concession flexibility
Perceived as less credible by some clients

Sole Trader Tax: The Tipping Point

Once your taxable income exceeds approximately $120,000 to $135,000 as a sole trader, you are paying 37 to 47 cents in tax on every additional dollar earned. Switching to a company or trust structure at this point can reduce your effective tax rate significantly.

Company Structure: Tax Benefits and Limited Liability

A company is a separate legal entity. It can enter contracts, own assets, employ staff, and incur liabilities in its own name, separately from the shareholders and directors. This is the key advantage over a sole trader.

Pros

Limited liability protection
Flat company tax rate (25 to 30%)
Retained earnings taxed at company rate
Easier to bring in investors or partners
Franking credits on dividends

Cons

More expensive to set up and maintain
Directors still personally liable in some cases
Profits must be paid as salary or dividends
No CGT discount (50%) at company level
More compliance and reporting requirements

Company Tax Rate vs Personal Tax Rate

Companies with aggregated annual turnover under $50 million pay a base rate of 25% company tax in FY2026. Larger companies pay 30%. Compare that to personal marginal rates of 37% on income from $135,000 to $190,000 and 45% above $190,000. For businesses retaining profits for reinvestment, the company structure offers a clear tax advantage.

Our team handles all the paperwork. Learn more about our Company, Trust and SMSF Setup Service for a seamless, compliant registration process.

Accountant explaining LRBA Limited Recourse Borrowing Arrangement structure to SMSF client

A Chartered Accountant can identify the most tax-effective structure for your revenue level and growth plans.

Trust Structure: Flexibility, Income Splitting, and Asset Protection

A discretionary (family) trust is the most flexible structure for Australian small business owners with family members. The trustee has discretion each year over how to distribute trust income among beneficiaries, which allows income to be split in a tax-effective way among family members in lower tax brackets.

Pros

Income splitting across family members
Strong asset protection if structured correctly
CGT discount (50%) available to individuals
Flexibility in annual distribution decisions
Effective for estate planning

Cons

Cannot retain profits, all income must be distributed
More complex and costly to administer
Losses cannot be passed to beneficiaries
Trust deed must be carefully structured
Increased ATO scrutiny on distributions

Comparison Table: Sole Trader vs Company vs Trust

	Sole Trader	Company (Pty Ltd)	Discretionary Trust
Setup Cost	~$100 to $300	~$800 to $1,500	~$1,500 to $3,000
Annual Compliance	Low	Medium to High	Medium
Tax Rate	Personal (up to 47%)	25 to 30% flat	Distributed at beneficiary rate
Income Splitting	No	Limited (dividends)	Yes, full flexibility
Liability Protection	None	Yes (limited liability)	Yes (if structured correctly)
CGT Discount (50%)	Yes	No	Yes (via individual beneficiaries)
Retained Earnings	No (personal income)	Yes	No (must distribute annually)
Best For	Freelancers, low-income businesses	Growth businesses, investors	Family businesses, asset holding

Good to know: The right structure for your business today may not be right in three years. Reviewing your structure annually is part of good financial management.

Which Business Structure Should I Use in Australia?

Here is a practical decision guide based on your situation:

Under $80k revenue, no employees

Sole trader. Keep it simple and cheap.

$80k to $200k revenue, growing

Consider a company, especially if you want to retain profits or bring in investors.

$200k+ revenue, family involved

A discretionary trust (often with a corporate trustee) gives the most flexibility for income splitting and asset protection.

Planning to sell the business

A trust structure often allows the CGT 50% discount to flow through to individual beneficiaries, which can save a substantial amount on sale.

Important: Restructuring later is possible but can trigger CGT events and stamp duty depending on the assets involved. Getting the structure right early is significantly cheaper than fixing it later.

Not sure which applies to you? Our Taxation and Accounting Services include annual structure reviews for growing businesses across Sydney.

Business Structure Setup and Advice from Chartered Accountants

We have set up hundreds of sole trader conversions, companies, and trust structures for Australian businesses. We do not recommend a structure based on what is easiest to set up. We recommend what is optimal for your tax position, asset protection needs, and growth plans.

If you are uncertain whether your current structure still makes sense, a structure review is one of the best-value advisory engagements we offer.

Chartered Accountants ANZ
Structure Specialists
Company & Trust Setup
Tax Planning Experts
Sydney Based

Book a Free Consultation
Call 02 9980 1556

Frequently Asked Questions

What is the difference between a sole trader and a company?
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A sole trader and the business are the same legal entity. The owner is personally liable for all business debts. A company is a separate legal entity with its own ABN, tax file number, and ASIC registration. Shareholders have limited liability, and the company is taxed at a flat rate (25 to 30%) rather than the owner’s personal marginal rate.

Is it better to be a sole trader or a company for tax purposes?
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At lower income levels (below approximately $80,000), a sole trader typically pays less tax because the personal tax rate is below the company rate. Once income exceeds $120,000 to $135,000, the company’s flat 25% rate becomes more tax-efficient. A discretionary trust can be even more effective by splitting income across family members in lower tax brackets.

Which structure is right for me: sole trader, company, or trust?
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It depends on your revenue level, risk exposure, family situation, and growth plans. Sole trader is best for very small, low-risk businesses. A company suits growth-focused businesses wanting to retain profits or reduce personal liability. A discretionary trust is most flexible for family businesses, asset protection, and income splitting. Many businesses use a combination, such as a trust operating through a company trustee.

What is a discretionary (family) trust?
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A discretionary (family) trust is a structure where a trustee holds assets or runs a business on behalf of beneficiaries. The trustee has discretion each year to decide how to distribute income among the beneficiaries. This allows income to be directed to family members in lower tax brackets, reducing the overall family tax bill legally.

How much does it cost to register a company in Australia?
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Registering a company with ASIC costs $597 for a standard proprietary limited company (as of 2026). Accounting for professional fees to set up the company constitution, shareholders agreement, and ABN/TFN/GST registration, total setup costs typically range from $800 to $2,000 depending on the provider.

Can I change from a sole trader to a company later?
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Yes, but there are tax and legal implications. When you transfer business assets from your sole trader operation to a new company, CGT events may be triggered, although rollover relief may be available in some circumstances under the small business CGT concessions. It is important to plan the transition carefully with an accountant to minimise the tax cost.

What are the main benefits of a company over a sole trader?
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The main benefits of a company over a sole trader are: limited liability protection for directors and shareholders, access to the flat company tax rate (25 to 30%), the ability to retain and reinvest earnings at a lower tax rate, greater credibility in certain industries, and the ability to issue shares to bring in partners or investors.

Which provides better asset protection: a company or a trust?
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Both provide better protection than a sole trader, but in different ways. A company provides limited liability. Creditors generally cannot pursue the personal assets of shareholders. A discretionary trust can protect assets by holding them separately from the operating business. If the business is sued, trust assets may be quarantined. Many business owners use a trust to own assets and a company to operate the business for maximum protection.

Get the Right Business Structure From Day One

Talk to our Chartered Accountants about whether your current structure is still serving you, or costing you. A structure review is one of the most impactful engagements we offer.

Book a Free Consultation
Call 02 9980 1556

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