What is the difference between a sole trader and a company?

A sole trader is an individual running a business, personally responsible for all its aspects, debts, and liabilities. They report income on their personal tax return. In contrast, a company is a separate legal entity registered with ASIC. It provides limited liability to its shareholders, has its own tax obligations, and requires annual reporting and reviews. While sole traders have simpler setups and lesser costs, companies offer better liability protection and potential tax benefits. Consulting our business structure experts can help in determining the most suitable setup for your business needs.