What Are the Different Types of Business Structures

When you’re starting a business, there’s a lot to do and think about. One thing many people overlook is the form their business should take of the many different types of business structures available. Not all business structures are the same, and some may be more suitable than others. Whatever kind of business you’re starting, there will be a structure that is best. Do you know what it is?

Taggart & Partners are experts in the operational and tax benefits of different business structures. For more than 20 years, we’ve been one of Brisbane’s best-respected smb accountants.

We are ready to help you take the first steps with company structure advice, and to stand by you as your trusted business advisor. It is very easy to get started. Call us on (07) 3391 1188, e-mail us at enquiries@taggartandpartners.com.au or get in touch online.

The Different Types of Business Structures to Choose From

There are seven types of business structures (and some sub-types), covering a broad range of enterprises. Each of them is tailored to fit different circumstances and goals. You can change your business type, but it’s best start out with the one that best serves your needs. Each business type has many differing details of cost, reporting requirements, tax and employment issues – a professional advisor is recommended to help you navigate these complex waters. Here is a quick look at the different types of business structures:

Sole Trader

You are on your own – responsible for everything in your business, including being personally liable for debts and losses, and for payment of taxes on business income. You can use your own bank account, although a separate business account will make it much easier to keep track of costs and income. You will need to keep all financial records for at least 5 years. You can employ staff – if you do, you’ll need to provide worker’s compensation insurance and make superannuation contributions. This business structure is usually the easiest and least expensive to set up, but doesn’t provide the legal protections that some others do.


Two or more people make a partnership – they agree to share profits and losses from the enterprise. There are three types of partnerships:

  • General Partnership – All partners share equally in running the business, division of profits, and in any losses and debts.
  • Limited Partnership – Similar to General Partnership, except that a limited partner’s liability is limited to the amount of money they invested. Most of the limited partners will also have limited participation in running the business.
  • Incorporated Limited Partnership – At least one general partner who has unlimited liability, with other partners whose liability is limited. The general partner(s) run the business, and the limited partners are usually passive investors.

Partnerships must have an Australian Business License, and must file a partnership tax return, although the partners each file individually and pay tax on any profits they have received. Partnerships must file for GST if they do more than $75,000 of business in a year.

Additional partnership laws vary by states and territories.


One of the more unusual types of the different company structures, this is a legal entity intended to provide for the needs and interests of 5 or more people. Members may engage in business and the company may be for-profit or non-profit. Usually created to give access to goods and services that are expensive or hard to obtain otherwise. There will be one or more directors, but all members share equally in the tasks of running the co-operative. Members do not have personal liability for debts of the co-operative. There are two types of co-operatives:

  • Distributing Co-operative – Members must own a minimum number of shares in the co-operative, which maintains working capital and may distribute annual profits to members.
  • Non-Distributing Co-operative – Retains any profits to further the purpose and work of the co-operative. May charge members a subscription fee. It is legally a non-profit enterprise.

All members of a co-operative have an equal vote at meetings, and they must remain active in the co-operative to keep their membership. Anyone can apply to become a member – the director(s) will decide on who is to be invited to join.

Additional regulations governing co-operatives vary by states and territories.

Joint Venture

An agreement between 2 or more people, companies, or organisations to work together to complete a specific project. Participants share costs, losses, and any profits from the venture. There will be a legally binding agreement setting out the many details of the venture and governance of its operations.


A stand-alone entity separates from any of the individual people who may be involved. It has the same rights as a natural person. It can bring legal action and be sued. No person who is only a member or shareholder of the company has liability beyond paying the full price of the shares they own. Directors run the company and may be liable for breach of their legal obligations to the company.

Of all the different business structures, companies are usually the most expensive and complicated to set up and run – they are best suited where large operations are anticipated, or there are significant investment or tax advantages to be gained. Expert legal guidance is advisable on an ongoing basis, to make sure all necessary actions are taken to keep the company and directors in compliance and good standing with regulations and governing authorities.


In a trust, the trustee operates a business for the beneficiaries of the trust. The trustee may be a person or a company. A trust is usually set up to protect a business and its assets, and isolate the beneficiaries from any adverse action against the business. The trust is operated under the provisions of a legal document known as a trust deed, which sets out all the details of how the trust is to be run. The trustee will make decisions about running the business and distribution of any profits to beneficiaries based on the trust deed. Trusts are among the more complex of the different types of business structures. They can be very useful, but they generally serve a limited scope of interests.

Indigenous Corporation

Works to provide benefits for Aboriginals and Torres Strait Islanders, such as access to education, housing, land acquisition, legal assistance, infrastructure development, and more. Indigenous business owners may register as an Indigenous Corporation. The structure is similar to a not-for-profit limited-liability corporation, and requirements are straightforward. The process is administered by the Office of the Registrar of Indigenous Corporations (ORIC).

Getting Started with Taggart & Partners

We’ve touched on the basics of the different company structures that are available. The next step is to consult with a trusted business advisor to fill in many details, help you decide which is right for your enterprise, and to guide you in getting set up. Taggart & Partners has been assisting new businesses for many years. We are here to listen to you, answer your questions big and small, and to make it easy for you. As your business grows, you’ll take advantage of all the ways we can help with issues of taxation, strategies for expansion, dealing with assets and property, and valuing your business when the time eventually comes to sell.

For a friendly consultation, call us on (07) 3391 1188, e-mail us at enquiries@taggartandpartners.com.au or get in touch online. It only takes a moment to gain the many benefits of comprehensive, professional business advice.

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