Commencing a business as a sole proprietor

The decision to conduct business as a sole proprietor, or to instead choose another form of business structure will be influenced by many factors, including:

• • the individual's appetite for risk;
• • the number of parties wishing to be involved in the business;
• • the desire for long term operations, whether the individual has a dynastic view of their business;
• • tax planning;
• • estate planning;
• • asset protection;
• • the individual's access to capital;
• • comparatively low compliance costs; and
• • the physical area of business operation.

Establishing a sole proprietor business requires minimal formalities. Unlike companies, for example, there is no separate legislation which governs the way a sole proprietor structure must be established or the way a sole proprietorship is governed. However, a person trading under this type of structure will be subject to the many laws which apply to running businesses generally, such as employment and occupational health and safety laws, laws about fair trading and consumer protection, taxation and so on.

The primary registration obligations of a sole proprietor relate to:

• • business names;
• • tax, including a Tax File Number, an Australian Business Number, Goods and Services Tax registration and so on; and
• • regulated industry or activity specific registrations.

See Commencing a business as a sole proprietor.