4 different ways to legally construct a company

If you’re looking to establish a business, there are a number of different legal issues that need to be considered. Along with choosing a company name and finding a premise, selecting a business structure is an important decision to make.

At the same time, finding the right business structure for your needs is dependent on a number of different considerations. To help, here are four of the ways you can structure your organisation:

Sole traders

By far the most common business type in Australia, sole traders are are businesses that only have one owner – you. You can employ as many staff as you need. Running your operations as a sole trader is the simplest structure, as you the owner will have full responsibility for the debts of the organisation as well as any profits.


Trusts are a form of business in which commercial activities are carried out on behalf of a beneficiary or beneficiaries by a trustee. While a trust is more costly than other legal structures, it can be incredibly useful, largely because it separates ownership of the assets held by the trust from day-to-day management. As a result, trusts are very common during the estate planning process.


A partnership exists when two or more individuals, companies or trusts arrange to enter into a business together. Any entity which is a partner in a business has a legal obligation to ensure the other partners are aware of their activity and of the overall performance of the organisation.

All partners will also share in the liability that comes from their operations, making it valuable to have a partnership agreement in place to oversee the relationship between owners.


Establishing a corporation is very common for businesses that are growing and taking on a larger range of operations. The key advantage of a company is that the shareholders are not personally responsible for any losses the business incurs. Their exposure is limited to their shareholding and any debts they choose to guarantee for the company.

To find the best company structure for your business, it is important to seek advice from a commercial lawyer