The notion that every business begins with a great idea can inspire the entrepreneurial spirit in just about anyone, but it doesn’t quite capture the full story.
To actually start a business, you’ll need to register it.
Registering your business with the authorities determines who owns the business, how you’ll be taxed, and other critical details about how your business will operate.
Business registration is especially important for partnerships, but all entrepreneurs should eventually register their business.
Disclaimer: This content should not be construed as legal or tax advice. Always consult a legal or tax professional regarding your specific situation.
Before registering your business, you’ll need to decide on the best structure for your business.
From the outside, all businesses might seem similar — one or more people selling goods or access to their services.
However, there are several different kinds of business structures, each with specific benefits and challenges.
The type of structure you choose will determine:
Who owns the business
The extent of your personal liability for business debts
Your taxation obligations
So, you’ll want to get it right.
Let’s compare the different types of business entities so you can pick the structure that work best for you long term.
Sole trader
A sole trader business is owned and managed by one person. Legally, there is no distinction between the business owner and the business itself.
This makes the taxes associated with the business quite simple.
But it comes with a risk — the owner is personally liable for the business. This means their personal assets are at risk if the business can’t pay its debts.
You must pay the compulsory superannuation guarantee if you employ staff (currently 11% of each staff member’s ordinary time earnings, rising to 12% on 1 July 2025).
A general partnership is run by two or more people who share in the business profits, losses and assets.
This business entity is similar to the sole proprietorship, as the partners are personally liable for the business. This entity is relatively easy to set up or dissolve.
Ownership: Two or more people
Owner liability: Unlimited personal liability
Taxes (use the links above for ATO details):
Each partner pays personal income tax on their share of partnership profits at their individual marginal rate.
Goods and services tax if the partnership’s annual turnover exceeds $75,000
Pay as You Go (PAYG) withholding or instalment tax if the partnership employs staff
May be required to lodge business activity statements (BAS) to the Australian Taxation Office, depending on level of annual turnover
Must lodge a partnership tax return with the Australian Taxation Office each year
Superannuation:
The partnership must pay the compulsory superannuation guarantee if employing staff (currently 11% of each staff member’s ordinary time earnings, rising to 12% on 1 July 2025).
Superannuation payments for partners are optional.
Must comply with all the provisions of the Partnership Act of the State or Territory where they are based.
Pros
Cons
Easy to set up
Partner's assets are at risk
Low fees/cost (compared to company structure)
Easily dissolved if one partner leaves
Limited partnership
In a limited partnership, two or more partners run the business like they do in a general partnership.
However, unlike general partnerships, individuals in a limited partnership are not held personally liable for all partnership debts.
Partners’ liability is limited to the amount of money they have invested in the partnership.
A limited partnership is a common entity for law firms, real estate agents and other organisations where individuals work somewhat independently while pooling resources.
Ownership: Two or more partners
Owner liability: Each partner is liable up to the amount they’ve invested in the business
Taxes (use the links above for ATO details):
Each partner pays personal income tax on their share of partnership profits at their individual marginal rate.
Goods and services tax if the partnership’s annual turnover exceeds $75,000
Pay as You Go (PAYG) withholding or instalment tax if the partnership employs staff
May be required to lodge business activity statements (BAS) to the Australian Taxation Office, depending on annual turnover
Must lodge a partnership tax return with the Australian Taxation Office each year
Superannuation:
The partnership must pay the compulsory superannuation guarantee if employing staff (currently 11% of each staff member’s ordinary time earnings, rising to 12% on 1 July 2025).
Superannuation payments for partners are optional.
Requirements:
Written partnership agreement
A partnership tax file number
An Australian Business Number (ABN)
Management responsibilities must be equally divided
Must comply with all the provisions of the Partnership Act of the State or Territory where they are based
Pros
Cons
Limited partners can leave without dissolving partnership
Harder to set up and maintain
Creditors cannot go after limited partners if partnership fails
Partners can share benefits without management
Incorporated limited partnership
An incorporated limited partnership has the same characteristics as a limited partnership with one major exception.
At least one of the partners must have unlimited liability for the debts of the partnership, while one or more of the other partners have limited liability.
You can only apply to be an incorporated limited partnership if you are a:
Venture capital limited partnership (VCLP)
Early-stage venture capital limited partnership (ESVCLP)
Australian venture capital fund of funds (AFOF)
Venture capital management partnership (VCMP)
An incorporated limited partnership is a hybrid of the general partnership and limited partnership structures.
Ownership: Two or more partners.
Owner liability: At least one partner has unlimited liability, while the liability of one or more other partners is limited to the amount each has invested in the business.
Taxes: (use the links above for ATO details)
Each partner pays personal income tax on their share of partnership profits at their individual marginal rate.
Goods and services tax if the partnership’s annual turnover exceeds $75,000
Pay as You Go (PAYG) withholding or instalment tax if the partnership employs staff
May be required to lodge business activity statements (BAS) to the Australian Taxation Office, depending on your annual turnover
Must lodge a partnership tax return with the Australian Taxation Office each year
Superannuation:
The partnership must pay the compulsory superannuation guarantee if employing staff (currently 11% of each staff member’s ordinary time earnings, rising to 12% on 1 July 2025).
Superannuation payments for partners are optional.
Requirements:
Written partnership agreement
A partnership tax file number
An Australian Business Number (ABN)
Management responsibilities must be equally divided
Partners must comply with all the provisions of the Partnership Act of the State or Territory where they are based
Pros
Cons
Limited partners can leave without dissolving partnership
Harder to set up and maintain
Creditors cannot go after limited partners if partnership fails
(but can go after the unlimited partner/s)
Partners can share benefits without management
Proprietary limited company
In many ways, the proprietary limited company (designated by the “Pty Ltd” abbreviation after the company’s name) is the best of both worlds between partnerships and companies.
Owners experience the no-liability protection of a publicly listed company on the share market, meaning that their personal assets are not at risk if the business fails.
The only exception to this is if director penalties are issued by the Australian Taxation Office due to unpaid tax or superannuation.
Furthermore, limited liability companies have a simpler and separate tax structure than partnerships (where taxes are passed through to each partners' personal taxes).
Goods and services tax if the company’s annual turnover exceeds $75,000
Pay as You Go (PAYG) withholding or instalment tax if the company employs staff
May be required to lodge business activity statements (BAS) to the Australian Taxation Office, depending on annual turnover
Must lodge a company tax return with the Australian Taxation Office each year. The company tax rate in Australia is 25% for companies with an annual turnover under $50 million.
Superannuation:
The company must pay the compulsory superannuation guarantee if employing staff (currently 11% of each staff member’s ordinary time earnings, rising to 12% on 1 July 2025).
Higher cost to set up than partnerships and sole trader structures
Directors can leave without dissolving the company
No liability for owners (except director penalties if applicable)
Trust
Under a trust business structure, either an individual or a company can act as the trustee responsible for managing business affairs on behalf of beneficiaries.
A key benefit of a trust is that its net income can be distributed to beneficiaries in the most tax-effective way (such as distributing more income to family beneficiaries who have lower marginal tax rates).
Ownership: One or more individuals or a company as the trustee/s
Owner liability: Unlimited liability
Taxes (use the links above for ATO details):
Each trust beneficiary pays personal income tax on their share of trust distributions at their individual marginal rate.
Goods and services tax if the trust’s annual turnover exceeds $75,000
Pay as You Go (PAYG) withholding or instalment tax if the trust employs staff
May be required to lodge business activity statements (BAS) to the Australian Taxation Office, depending on level of annual turnover
Must lodge a trust tax return with the Australian Taxation Office each year
Superannuation:
The trustmust pay the compulsory superannuation guarantee if employing staff (currently 11% of each staff member’s ordinary time earnings, rising to 12% on 1 July 2025).
If a trust business venture makes a loss, it cannot be distributed to beneficiaries to reduce their personal income tax liability, but the loss can be carried forward to offset against future income.
Not-for-profit (NFP) organisation
As the name suggests, a not-for-profit is an entity that exists not to earn a profit, but to serve a charitable, educational, religious or other social purpose.
These businesses enjoy tax-exempt status, but they also cannot distribute any profits to their owners or shareholders.
The minimum cost for a standard trade mark application is currently $250, and it can go as high as $600.
When checking for a business name, be sure you also consider whether a website domain is available for that name. You’ll use this as your web address, so having a domain name that matches your business name makes it easier for customers to find your website.
Check to see if the name you want is available now!
Once you have confirmed that your desired business name is available in Australia, it’s time to begin filing the rest of your business registration application.
Editor’s note: Starting a business? GoDaddy can help set you up with its free logo maker, free website builder and productivity tools like Microsoft 365, backed by GoDaddy's award-winning support.
Applying for trade marks or copyrights
By applying for the appropriate trade marks or copyrights, you can ensure that your business and livelihood are protected from use by others.
Your business idea and products are valuable and worth protecting!
But a trade mark doesn't just keep a business name from being used by others. You can also trade mark other business assets like your logo or slogan.
Any business that considers its branding (e.g. logo, slogan, colours) to be a distinguishing factor that separates it from its competition might want to invest in a trade mark.
For example, a trademark on your business slogan or logo means that a competitor down the street can’t market their products or services with the same language or imagery.
On the other hand, copyright protects original works so that only the owner can display or sell that work
The following businesses might benefit from ensuring copyright:
Photography businesses that sell stock images
Bloggers that write about current events
Musicians that sell albums or access to downloadable sound bites
The good news is that you don’t need to register for copyright in Australia. It exists as soon as your idea or creative concept exists in some form, and it’s protected by the Copyright Act 1968.
Some businesses will need to obtain certain licences and permits to operate.
These licences and permits can apply at the federal, state and territory levels, depending on the type of business or industry.
Federal licences and permits impact a fairly narrow group of business activities, but they apply nationally.
State and Territory licences and permits on the other hand apply to a wider range of businesses. They can vary a great deal from State/Territory to State/Territory.
You can search for any relevant Federal or State/Territory licences and permits for your business here, along with information on how to apply for each one.
In addition to the licences and permits required by the federal and the state/territory government where you intend to operate your business, you may also need to obtain business insurance.
If you will be employing staff, then workers’ compensation insurance is compulsory in Australia to cover your staff against medical costs and lost wages if they suffer a work-related injury.
Public liability insurance is also compulsory in Australia for certain types of businesses. This type of insurance insures your business against any third-party death or injury.
There are other common types of business insurance that are not compulsory but that may be worthwhile for your business:
Professional indemnity insurance, which protects service-based businesses (such as medical practices) from financial loss related to malpractice or errors.
Commercial property insurance, which covers businesses with physical and/or property assets (such as retail stores) from losses related to damage of their company property, such as from natural disasters or vandalism.
Personal or loss of income insurance, which can protect you if you have a loss of business income due to your own sickness, accident or injury.
Technology and cybercrime insurance, which helps to protect your business from online threats.
Finding local helping, joining small business groups
Starting a business can be a challenge, but you don’t have to go it alone. Using local resources, such as grants or webinars on topics helpful for entrepreneurs can give your business an advantage in the form of financial resources or valuable knowledge.
Starting a business can be a challenge, but you don’t have to go it alone. Using local resources, such as grants or webinars on topics helpful for entrepreneurs can give your business an advantage in the form of financial resources or valuable knowledge.
Consider connecting with other small business owners in your area.
You can:
Share insights about the customers in your community
Starting a new business is thrilling. But amid all the excitement, it’s important to remember the administrative tasks required to operate in your state or territory in Australia.
In this article, we’ve covered all the essential steps to help you manage those tasks:
Choosing your business structure
Picking the perfect name
Registering your business
Paying taxes
Getting the required permits, insurances and protections
If you're looking to expand your reach, understanding the best practices for online sales can be an integral part of your business strategy — we put together an entire guide on how to sell online effectively, check it out. Remember, you’re not alone — there are resources in your city, state, or territory to support you. There are also many small business owners you can network with and learn from
* Pricing current as of November 2023. Check here for current fees. *
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