Camden Professionals

Has Your Business Outgrown Its Structure?

When you first start a business, choosing a structure may seem like a straightforward decision.You might operate as a sole trader, partnership, company or trust based on your circumstances at the time.

But businesses change.As revenue increases, employees are hired, new owners become involved or the business expands into new markets, the structure that worked when the business started may no longer reflect how it operates today.

A business structure can affect taxation, registrations, reporting requirements, administration, ownership, control and personal liability.There is no single structure that is right for every Australian business, but changing circumstances can make a business structure review worthwhile.

What is a business structure?

In Australia, common business structures include sole trader, partnership, company and trust.Each structure has different legal, tax and administrative characteristics.

A sole trader structure is generally simple to establish and operate, while a company is a separate legal entity with its own obligations.Partnerships involve two or more people carrying on a business together, while trusts can provide a different way of holding and distributing business or investment assets.

The structure chosen can influence how the business is controlled, how income is treated and the extent to which owners may be personally exposed to business liabilities.Business.gov.au recommends considering factors such as the costs involved, tax implications, personal liability, control and the amount of paperwork and reporting required when choosing a structure.As a business develops, those considerations can change.

Signs your business structure may need a review

Business growth does not automatically mean you need to restructure.However, certain developments may be a good reason to revisit the original decision.

Your revenue has increased

A business that started with modest revenue may look very different several years later.Increasing turnover can change the tax and cash-flow considerations surrounding the business.It may also mean that the owner needs to consider whether the current structure remains appropriate for the scale and complexity of the operation.

You are employing staff

Taking on employees can introduce additional responsibilities, including PAYG withholding, superannuation and other employer obligations.While employing staff does not necessarily require a new business structure, it can be a useful trigger for a broader business health check.

New owners are becoming involved

Bringing a spouse, family member, business partner or investor into the business can significantly change ownership and control arrangements.The existing structure may not provide the most suitable framework for the new ownership arrangements, particularly where different people will have different financial interests or responsibilities.

The business is expanding

Expansion into new products, services, locations or markets can introduce new commercial risks and administrative requirements.For example, a business that began as a small consulting operation may eventually employ staff, enter significant contracts, lease premises and take on larger financial commitments.As the risks and responsibilities change, it can be sensible to review whether the existing structure continues to provide an appropriate foundation.

Your long-term goals have changed

Your original business plan may have been based on remaining a small owner-operated business.Several years later, you may be considering selling the business, bringing in investors, expanding interstate or passing the business to the next generation.Those future plans can be relevant when reviewing the current structure.

A structure review is about more than tax

Tax is an important consideration when reviewing a business structure, but it should not be the only one.The ATO recognises that different structures have different tax and reporting obligations.The broader commercial consequences should also be considered.

A review may consider:

Ownership and control – who owns the business and who makes important decisions?
Personal liability – what exposure do owners have to business debts and risks?
Tax obligations – how is business income taxed and what reporting is required?
Administration – how much record keeping, reporting and compliance is involved?
Succession planning – what happens if an owner retires, dies or wants to exit?
Growth – can the structure accommodate future expansion or additional owners?
Exit planning – could the current structure affect a future sale or transfer?

A structure that appears attractive because of a particular tax outcome may not necessarily be suitable when these broader considerations are considered.

When should you review your business structure?

There is no universal timetable for reviewing a business structure.Instead, consider undertaking a review when there has been a significant change in the business or when future plans have changed. Useful questions include:

Has the business grown significantly since it began?
Has turnover or profitability changed substantially?
Have you started employing staff?
Have new owners or investors become involved?
Has the business taken on significant debt or commercial risk?
Are you expanding into new markets or locations?
Have your personal or business goals changed?
Are you considering selling or transferring the business?
Has the current structure become increasingly difficult to administer?

If the answer to several of these questions is yes, it may be time to discuss whether the existing structure remains appropriate.

What happens if you decide to restructure?

Changing a business structure is not simply an administrative exercise.Depending on the circumstances, restructuring can have tax, legal, accounting and administrative consequences.

The ATO provides specific guidance on changing business structures and notes that there can be tax implications when moving from one structure to another.

These can include capital gains tax, income tax and other consequences depending on what is being transferred and how the restructure is undertaken.

There may also be new registrations, record-keeping requirements, contracts, licences or reporting obligations to consider.For this reason, business owners should obtain appropriate professional advice before implementing a restructure rather than changing the structure first and considering the consequences afterwards.

The business is expanding

Your long-term goals have changed

A structure review is about more than tax

A review may consider:

Ownership and control – who owns the business and who makes important decisions?
Personal liability – what exposure do owners have to business debts and risks?
Tax obligations – how is business income taxed and what reporting is required?
Administration – how much record keeping, reporting and compliance is involved?
Succession planning – what happens if an owner retires, dies or wants to exit?
Growth – can the structure accommodate future expansion or additional owners?
Exit planning – could the current structure affect a future sale or transfer?

A structure that appears attractive because of a particular tax outcome may not necessarily be suitable when these broader considerations are considered.

A business health check can identify opportunities

A business structure review can be part of a broader business health check.Business owners regularly review their pricing, staffing, cash flow, marketing and operational systems. The legal and tax structure supporting those activities deserves similar attention. A review can help identify whether the current structure continues to align with the business’s:

current operations;
ownership arrangements;
risk profile;
tax obligations;
administration requirements; and
long-term objectives.

It may also confirm that the existing structure remains appropriate and that no change is necessary.That can be just as valuable as identifying a potential restructure.

Recent tax reforms make structure reviews more important

The 2026–27 Federal Budget introduced significant proposed changes affecting business and investment structures, including a 30% minimum tax on discretionary trusts from 1 July 2028.Since the Budget, the Government has released a consultation paper and, more recently, exposure draft legislation providing further detail on how the new trust rules are intended to operate.

The latest proposals also include expanded restructuring options and rollover relief for eligible businesses and taxpayers considering whether their existing trust structure remains appropriate.These changes do not mean that every business operating through a discretionary trust needs to restructure.However, with significant tax reforms approaching, business owners should consider whether the structure they established years ago remains suitable for their current business, ownership arrangements and longer-term objectives.

Don’t wait until the business changes again

The structure selected when a business first started trading may have been entirely appropriate at the time.But businesses evolve. A growing business may have different ownership arrangements, greater revenue, additional employees, increased commercial risk and more ambitious plans than it did several years earlier. That does not automatically mean the business needs a new structure.

It does mean that the original decision should not necessarily be treated as permanent. Regularly reviewing the structure can help ensure it continues to reflect the way the business operates and the objectives of its owners. Before making any changes, obtain advice on the potential tax, legal and administrative consequences of restructuring.

Frequently Asked Questions

How often should I review my business structure?

There is no set period that applies to every business.A review can be particularly useful after significant changes in ownership, revenue, staffing, risk or business objectives.

Does business growth mean I need to change my structure?

Not necessarily.Growth can be a reason to review your structure, but whether a change is appropriate depends on your specific circumstances.

Is choosing a business structure mainly about tax?

No. Tax is one consideration. Ownership, control, personal liability, administration, succession and future growth should also be considered.

Can I change my business structure later?

Yes, but changing structures can have tax, legal and administrative consequences. Professional advice should be obtained before implementing a restructure.

What are the main business structures in Australia?

The common structures are sole trader, partnership, company and trust. Each has different legal, tax and administrative characteristics.

Where can I find Australian government information about business structures?

Business.gov.au provides information about choosing and changing business structures, while the ATO provides tax information and guidance relevant to different structures.

Do the recent Federal Budget and proposed trust tax changes mean I should review my business structure?

Potentially. The 2026–27 Federal Budget proposed significant changes affecting discretionary trusts, and the subsequent consultation paper and exposure draft legislation have provided further detail on how these changes may operate from 1 July 2028.These reforms do not mean every business needs to restructure, but businesses operating through trusts may benefit from reviewing whether their existing structure remains appropriate before the new rules commence.

How Can We Help?

If you have any questions or would like further information, please contact Camden Professionals on:

Phone: 08 9221 5522
Email: info@camdenprofessionals.com.au

You can also arrange a meeting so we can discuss your requirements in more detail.

General Information Disclaimer

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any person. Any advice contained on this page and on this website is General Advice and does not consider any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals and/or Investax Group, its officers, representatives, employees, and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Camden Professionals

Why Every Business Should Consider a Holding Company

As your business grows, so does your exposure to legal, financial, and operational risks. That’s why many savvy business owners turn to holding company structures — a smart way to protect assets, optimise tax outcomes, and prepare for future expansion.

A holding company helps you strike the right balance between growth and security, providing both a shield against trading risks and a platform for long-term business strategy. A holding company isn’t just for large corporations. For growth-minded SMEs, it can provide a smart, strategic foundation — offering asset protection, tax planning opportunities, and flexibility to evolve.

Before you restructure, speak with your accountant or adviser. With the right legal and tax advice, a holding company can become one of your most valuable business tools.

What Is a Holding Company?

A holding company is a business entity that exists primarily to own shares in other companies, rather than operate a business itself. It may hold assets such as:

Shares in subsidiaries
Real estate
Intellectual property
Cash or investments

Under Australian law (Corporations Act 2001), a company becomes a holding company when it owns more than 50% of another company or controls its board.

Holding Company vs Subsidiary: What’s the Difference?

A holding company sits at the top of the structure. It owns, manages, and protects assets but doesn’t trade. A subsidiary company conducts day-to-day business — selling products, managing projects, or servicing clients. Though legally separate, the holding company controls the subsidiary — a setup that’s key to asset protection and risk management.

Why Use a Holding Company?

Asset Protection

Separate ownership of assets and trading operations can shield valuable property, cash, and IP (Intellectual Property) if your trading business faces legal action or insolvency.

Dividends can be moved from the trading company to the holding company
IP, property or plant can be transferred to the holding company
If the subsidiary fails, the holding company’s assets remain protected

Tax Efficiency

With the right planning, a group structure can deliver significant tax benefits:

Franking credits on dividends passed between companies can be tax-free
Retained profits in the holding company can be reinvested or loaned out
Succession planning and investor onboarding can be simplified
Intercompany loans can be structured in line with Division 7A compliance

Strategic Growth

A holding company structure is ideal for:

Managing multiple business units
Investing in new ventures or businesses
Bringing in partners or future shareholders
Scaling operations while minimising risk

What Are the Potential Drawbacks of Setting Up a Holding Company?

To set up a holding company, you will need to incorporate an additional company. This means that you will face additional set-up and maintenance costs as well as reporting requirements from ASIC.

This is something that you will need to consider because operating two businesses may not be in your best financial interests. For reporting purposes with ASIC and the ATO, if your company structure meets the requirements under the relevant accounting standards, you may be eligible to submit one consolidated financial statement and corporate tax returns for all of your entities. This will assist you in streamlining the requirements and may make the reporting obligations more manageable.

Setting up a holding company isn’t always the right fit. Keep in mind:

Setup and admin costs: Two or more companies = more ASIC fees, bookkeeping, and compliance
Complexity: More entities = more tax returns (unless consolidated reporting applies)
Tax triggers: Transferring shares or assets may cause Capital Gains Tax or stamp duty
Division 7A risks: Intercompany loans must be properly documented and repaid to avoid tax penalties

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How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au or arrange a time for a meeting so we can discuss your requirements in more detail.

General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Camden Professionals

Tax Differences Between a Sole Trader and a Company

Choosing the right business structure—sole trader vs company—is a key decision that affects tax obligations, legal liability, administrative workload, and growth potential. While many businesses start as sole traders due to simplicity, increasing income and risk exposure often prompt a reevaluation of structure.

This guide outlines the key differences, with a focus on tax implications, so you can make an informed decision that aligns with your goals.

What is a Sole Trader?

A sole trader is the simplest business structure. As the sole owner, you’re legally and financially responsible for all aspects of the business. There’s no legal distinction between you and your business, meaning you are personally liable for any debts or legal issues.

Advantages

Low setup and ongoing costs
All income is yours
Simple tax reporting (just one personal tax return)
Tax offsets and deductions available for low-income earners
No compulsory super contributions (unless employing others)

Disadvantages

Full personal liability for debts and lawsuits
Fewer tax planning opportunities at higher income levels
Limited capacity for expansion or investment
Business ceases upon your death or retirement

What is a Company (Pty Ltd)?

A proprietary limited (Pty Ltd) company is a separate legal entity. This means it can own assets, enter into contracts, sue, or be sued independently of its owners. Shareholders have limited liability, so personal assets are generally protected from business debts.

Advantages

Limited liability for owners
Greater credibility with investors and lenders
Access to lower company tax rates (from 25%)
Easier to raise capital or transfer ownership
Greater options for employee incentives and tax planning

Disadvantages

Higher setup and compliance costs
Complex administration and legal obligations
Separate tax return required for the company
Profits distributed as dividends are also taxed

Sole Trader vs Company: Comparison Table

Feature	Sole Trader	Company (Pty Ltd)
Setup Cost	Low — No ACN or ASIC registration required	Consult with your accountant.
Tax Rate	Personal income tax rates (0%–45%)	25% (base rate entity) or 30% (others), no tax-free threshold
Tax Reporting	Income declared on personal tax return	Separate company tax return plus personal tax return for directors
Legal Liability	Unlimited — personal assets at risk	Limited liability — personal assets usually protected
Control	Full control by the owner	Control shared among directors and governed by company constitution
Profits	All profits go to the sole trader	Profits belong to the company; can be paid as wages, dividends, or retained
Super Contributions	Optional (unless employing others)	Compulsory super for employees, including director wages
Business Continuity	Business ends with the death or retirement of the owner	Company continues to exist independently of changes in ownership or directorship
Administrative Burden	Minimal — fewer reporting and compliance obligations	High — financial reports, ASIC compliance, tax returns, record-keeping
Growth Potential	Limited — cannot issue shares or raise capital easily	High — can raise capital by issuing shares, easier to attract investors
Employee Hiring	Owner cannot employ themselves or split ownership	Can employ directors, issue shares to staff, and offer stock-based incentives

Taxation: Sole Trader vs Company

Sole Trader Taxation

Taxed at individual marginal tax rates
Can access the tax-free threshold (up to $18,200 in 2024–25)
Simpler reporting: all income and deductions included in personal tax return
Tax planning opportunities are limited at higher incomes

Company Taxation

Company is taxed as a separate legal entity
No tax-free threshold — taxed from the first dollar earned
Base rate company tax is 25% for businesses with under $50 million turnover and 80% passive income
Directors/shareholders may be taxed on dividends or wages in addition to company tax

Which Business Structure Is Right for You?

Choosing between a sole trader and company structure depends on factors like income level, business risk, growth plans, and desire for asset protection.

Criteria	Best Suited Structure
Just starting, low income	Sole Trader
Need for asset protection	Company
Desire for tax planning flexibility	Company
Want to keep costs low	Sole Trader
Planning to attract investors	Company
Need to build a business legacy	Company

Conclusion: Balancing Simplicity and Strategy

Both structures have their place, and neither is better in all situations. A sole trader setup offers ease and cost-efficiency, ideal for startups or freelancers. In contrast, a company provides greater scalability, risk protection, and tax flexibility, making it the structure of choice for growing businesses.

Key Takeaways:

Sole traders benefit from simplicity, but bear full liability and higher personal tax as income grows.
Companies offer lower tax rates and asset protection but come with higher costs and complexity.
Consider your income, risk exposure, long-term goals, and admin capacity before choosing.
Seek advice from a qualified accountant or lawyer to ensure your structure aligns with your business plan.

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Structuring Your Business To Better Protect Your Assets

When starting your own business, you must employ the right people, build relationships with good clients, and market your business. However, considering how your business should be structured and whether it can effectively protect your business and personal assets may not make that list. After all, most businesses do not think they will face debts, legal challenges or other unforeseen circumstances that threaten their assets.

But the reality is many Australian companies find themselves precisely in that position. If you find yourself in such circumstances, you will be grateful to have chosen a business structure that better protects your wealth and assets. This article explores three steps you should consider when structuring your business to protect your assets better.

Step 1. Set Up Your Business as a Trading Company

Many business owners initially set up their companies as sole traders or partnerships because these structures are simpler and cheaper. In contrast, a company may seem more complex. However, setting up your business as a company has many benefits, including protecting your assets.

Under the law, a company is a separate legal entity capable of entering into contracts and incurring liabilities, such as debt. The company itself is obligated to perform those contracts and meet those liabilities, not the shareholders or the directors in their personal capacity.

As a result, should a successful claim be made against your business and your business cannot meet the monetary requirements of that claim, your creditors will only have recourse against the business and the business assets, not your personal assets.

Note: Nevertheless, any directors of the trading company would still be subject to directors’ duties under the law. Hence, in certain circumstances, they can be held personally liable. For example, directors are personally liable for the tax debts of a company.

Step 2. Set Up a Holding Company To Be the Shareholder of Your Trading Company

To protect your personal and business assets, you may consider setting up a holding company and making that company your trading company’s only shareholder. You should then provide any surplus cash from the business to the holding company as dividends or profit distributions. This way, the trading company is not holding a large amount of equity at any time.

Likewise, the holding company should own any valuable assets of the trading company and lease them to your trading company at a market rate. This separates your assets from your trading company which will carry on your everyday business. Therefore, should someone bring a claim against your business, your trading company does not hold any significant assets that your creditors will have access to.

Step 3. Set Up a Discretionary Trust To Hold Your Personal Assets

Steps one and two provide a structure that may protect your assets if your business runs into trouble. However, it is usual for third parties you deal with to require a company’s shareholders or directors to personally guarantee the performance of the trading company’s obligations under a contract. Most notably, this includes payment of debt.

Therefore, while ensuring your business performs all its contractual obligations, it is also important to take proactive steps to protect your personal assets. This is where step three comes in.

Under step three, you may set up a discretionary trust where you:

transfer your personal assets to the trust
appoint a corporate entity as the trustee and
appoint yourself as the beneficiary of the trust.

This trust structure can protect your personal assets from creditors’ claims, even if you become bankrupt. Although this step is great from an asset protection perspective, it can also mean significant tax implications associated with transferring assets to a new entity.

Many business owners seek to protect personal and business assets via business structures. Following some steps can save you a lot of wealth and heartache if your business finds itself in a difficult circumstance. One possible way to structure your business is by setting up your business as a dual company and placing your personal assets in a discretionary trust. Nevertheless, what constitutes the best structure for your business depends on your circumstances. Talk to you accountant and obtain legal advice when considering how you structure your business to protect your assets.

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What are the different types of business structures?

When first thinking about how to start a business, not many people worry about structure. But your business structure can affect how you’re treated by the government and by the law. Here are some of the ins and outs.

The main types of business structure are sole trader, partnership, and company. Your choice will affect your admin burden, tax, legal status, and your ability to raise money by selling shares. The table below runs through some of the main differences between a company, a partnership, and a sole trader.

Business Structures and their effects
Structure	Easy Admin	Simple Tax	Legal Protection	Selling Shares
Sole Trader	Yes	Yes	Not necessarily	No
Partnership	Yes	Yes	Not necessarily	No
Company	Not necessarily	Not necessarily	Yes	Yes

If you don’t choose a business structure

If you don’t choose a structure when starting a business, you’ll be assumed to be a sole trader. That’s how a lot of people start out. However, it’s worth understanding what it means to be a sole trader and getting your head around the other structures. Speak to an accountant before making any changes.

Sole traders – Advantages and Disadvantages

A sole trader is a single-owner business. It doesn’t have to be a single-worker business, so you can hire staff. It’s easy to set up as a sole trader and tax is simple. You just declare income on your personal tax return. A sole trader doesn’t have any special legal status, which means the owner is personally responsible for what the business does. If the business gets into debt or legal trouble, so does the owner. Your choice of insurance becomes very important.

Partnerships – Advantages and Disadvantages

A partnership is owned by two or more people. There are no rules about how it’s divided. One partner can own 99% of the business. It’s easy to set up as a partnership, though you may need an official letter that sets out the agreement between partners. Tax is simple too. You just declare your share of business income on your personal tax return. If the business gets into financial or legal strife, the partners do too. You could also get into difficulty if one of the other partners does something wrong. Your choice of insurance becomes very important.

What are Partnership Agreements

A simple business partnership agreement should include the following:

state the legal name of the partnership and define what your business does
name the owners and show how many shares each holds
appoint a primary business officer
say when and how income is distributed among the partners
include a process for resolving disputes, bookkeeping and the management of finances
outline how the partnership can be wrapped up (and how debts or profits would be distributed).

As you can imagine, even a simple business partnership agreement can get big and complicated. Do your research or ask an accountant or lawyer to help.

Companies – Advantages and Disadvantages

A company is legally separate from its owner (or owners), which means you’re less exposed to legal or financial issues. A company can be owned by one person or many. You get some legal and financial protection if things go wrong – your accountant or a lawyer can give you the lowdown. Your business income may also get taxed at a lower rate. You can also sell shares in your company to raise money.

It will cost you more to operate as a company than as a sole trader or partnership. There’s also more admin. You’ll need to know how the company will operate before you get started, and you’ll have to regularly submit paperwork to the ATO or ASIC.

You’re not locked into one structure forever. A lot of businesses start out as sole trader or partnerships and grow into companies. You might change your business structure if you start getting bigger and doing more complex projects which carry a greater financial or legal risk for you.

Where do Franchises fit in?

If you buy into a franchise, you don’t automatically become part of their business. You form your own business and enter into a deal with the franchisor. You may be able to choose your own business structure, or the franchise agreement may require it to be set up in a specific way, such as a company.

What are the Tax Obligations for each Business Structure?

Sole Traders

As a sole trader, you:

use your individual tax file number (TFN) when lodging your tax return
report all your income in your individual tax return, using the section for business items to show your business income and expenses (there is no separate business tax return for sole traders)
are entitled to an Australian business number (ABN) and use that ABN for all business activities
must register for goods and services tax (GST) if
- your annual GST turnover is $75,000 or more
- you provide taxi, limousine or ride-sourcing services (regardless of your GST turnover)
- you want to claim fuel tax credits
may be required to lodge business activity statements, for example if you are registered for GST, have employer obligations such as PAYG withholding, or have PAYG instalments
pay tax on all your income, including income from your business, based on your individual tax rate
may voluntarily use, or be required to make, PAYG instalments to prepay your income tax
can claim a deduction for any personal super contributions you make after notifying your fund
can hire workers and need to meet all employer and super obligations for them.

As a sole trader, you can claim a deduction for salary, wages and allowances you pay your workers on your tax return. You cannot claim a deduction for money or assets you take from the business for personal use.

Partnerships

A partnership:

has its own TFN
must lodge an annual partnership return showing all business income and deductions and how its income or losses are distributed to the partners
must apply for an ABN and use it for all business activities
must register for GST if it
- has annual GST turnover of $75,000 ($150,000 for not-for-profit organisations) or more
- provides taxi, limousine or ride-sourcing services (regardless of GST turnover)
- wants to claim fuel tax credits
- may be required to lodge business activity statements, for example if it is registered for GST, has employer obligations such as pay as you go withholding, or have pay as you go instalments

A partnership does not pay tax. Each partner reports their share of the net partnership income or loss in their own tax return and is personally liable for any tax that may be due on that income.

A partnership and its partners cannot claim a deduction for money they withdraw from the business. Amounts you take from a partnership are not wages for tax purposes and may affect what your share of the partnership income is that you have to pay tax on

You will need to be aware of the steps to take if you change the makeup of your partnership.

Companies

A company is a separate legal entity with its own tax and superannuation obligations, run by its directors and owned by its shareholders. A company’s income and assets belong to it, not its shareholders. There may be tax consequences if you are using your company’s money and assets for private purposes.

A company can distribute profits to its shareholders through dividends and may be able to attach franking credits to those dividends. This allows its shareholders to receive a credit for the tax already paid by the company on its profits.

A company:

is responsible for its own tax and superannuation obligations
must apply for its own TFN
is entitled to an ABN, if it is registered under the Corporations Act 2001
if the company is not registered under the Corporations Act 2001 it may still register for an ABN if it is running a business in Australia
must register for GST if it
- has annual GST turnover of $75,000 ($150,000 for not-for-profit organisations) or more
- provides taxi, limousine or ride-sourcing services (regardless of GST turnover)
- wants to claim fuel tax credits
may be required to lodge business activity statements, for example if it is registered for GST, has employer obligations such as PAYG withholding, or has PAYG instalments
owns the money that the business earns (you may have to pay tax on any money taken out for personal use)
must lodge an annual company tax return
usually pays its income tax by instalments through the pay as you go instalments system
pays tax at its applicable company tax rate
must pay super guarantee for any eligible workers (this includes any company directors)
must issue distribution statements to any shareholders it pays a dividend to

Source: ATO

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