Sole Trader
Partnership
Company
Unit Trust
Discretionary Trust
Where is tax assessed Individual
Partners
Company
Beneficiary (or trustee)
Beneficiary (or trustee)
Do principals have fixed interest Yes
Yes
Yes
Yes
No, in most cases.
Regulatory body N/A
N/A
ASIC
N/A
N/A
Income Splitting No
Limited by S.94 ITAA 1936 and PSI rules
Salaries or dividends, but note PSI rules
Salaries or distributions but note PSI rules
Salaries or distributions but note PSI rules
50% CGT discount Yes
Yes
No
Yes (exceptions)
Yes(exceptions)
Can principal be employed No
No
Yes
Yes
Yes
Superannuation contributions Self employed
Self employed
Employer sponsored
Employer sponsored
Employer sponsored
Who registers for GST Individuals
Partnership
Company
Trust
Trust
Establishment documents None
Partnership agreement
Constitution/RR
Trust deed
Trust deed
Separate entity N/A
No
Yes
No
No
Who controls Individual
Partners
Directors / Shareholders
Trustee / Unit holders
Trustee / Appointer
Stamp duty None
None
None
Depends on state
Depends on state
Perpetual existence Terminates on death
Terminates on change in partners
Yes
Must vest within certain period
Must vest within certain period
Limited liability No
No
Yes
Can be if trustee a company
Can be if trustee a company
Complexity Simple
Simple/Medium
Complex
Complex
Complex
Cost to establish and operate Low
Medium
High
High
High
Main Governing Laws No specific act
Partnership Act
Corporations Act
Trustee Act
Trustee Act
Reporting to public No
No
Yes
No
No
Basis of tax accounting Cash or accruals
Cash or accruals
Accruals generally Cash if in STS
Accruals generally Cash if in STS
Accruals generally Cash if in STS
Distribution of losses Individual can use
Partners can use
Trapped in company
Trapped in trust
Trapped in trust
Carry forward of losses No restrictions
No restrictions
Continuity of ownership and same business test restrictions
Compliance with trust loss laws
Compliance with trust loss laws
Transfer of losses No
No
New consolidation laws apply from 1 July 2001
No
No
Disclaimer: This is not advice. Items herein are general comments only and do not constitute or convey advice per se. The information contained in this article is for guidance only and should not be relied upon without obtaining professional advice having regard to your specific circumstances.
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