Company & Trust Set-up

Start with whether you need one

Plenty of businesses run perfectly well as a sole trader. The ATO describes it as the simplest and cheapest way to run a business: you use your own tax file number, report the business income in your own return, and there is no separate business return. The trade-off is that you are personally responsible for the business's debts.

A company is a separate legal entity. Its income and assets belong to it, it lodges its own tax return, and it pays tax at the company rate. It also costs more to set up and run, and its directors carry legal duties. A trust holds property for its beneficiaries, and the trustee decides each year who receives the income, within what the deed allows. Both make sense in the right circumstances, and both are a waste of money in the wrong ones.

The choice itself, with the tax rates, the trade-offs and how a family or unit trust runs year to year, is covered on our structures and wealth page. This page is about the set-up, once a company or trust is the right answer.

What we do

What we need from you

• Full names, dates of birth and home addresses for each proposed director, secretary and shareholder. ASIC shows shareholder and officeholder details on the public register, though an officeholder with safety concerns can ask ASIC to hide their residential address.
• Each director's director ID.
• The registered office address and principal place of business, which do not have to be the same.
• How the shares will be split, and who will hold them.
• For a trust, who will be trustee, settlor and appointor, and who the beneficiaries are meant to be.
• Identity documents for the checks described below.

The new client form is the easiest place to start.

Family trusts, unit trusts and corporate trustees

A trust is created by a deed, which sets out what the trustee may do and who can benefit. The settlor is the person who creates it, and the trustee must deal with the trust property in line with the settlor's intentions as written in the deed. We arrange the deed and take you through it before anyone signs, because it governs what the trustee can and cannot do for as long as the trust lasts.

The trustee can be one or more people, or a company. Under trust law a trustee is personally liable for the trust's debts, with a right to be repaid from the trust's assets, which is one reason people choose a company for the role. The company is registered with ASIC in the usual way, and every director needs a director ID.

The trustee registers the trust for its own TFN and, if it carries on a business, an ABN. The ABN record will read 'The Trustee for' followed by the trust's name. The trustee lodges a trust tax return every year, whatever the amount of income, unless the ATO says one is not required.

For a family (discretionary) trust, the trustee resolves each year which beneficiaries are entitled to the income. That decision has to be made by 30 June, or earlier if the deed says so. Miss it and the trust's net income can be taxed to a default beneficiary or to the trustee, possibly at the top rate. A unit trust works differently: income follows the units each holder owns, so the job is keeping the unit register accurate.

A trust with 'family' in its name is not a family trust for tax purposes. That status comes from a family trust election, made by the trustee in writing on the ATO's form. It names one individual, and the trust's family group is worked out from that person. It gives access to some concessions, including on trust losses and franking credits, but distributions to anyone outside the family group then attract family trust distribution tax at the top rate. A trust can make only one election, the year it covers must already have ended, and it can be changed or revoked only in limited cases. For a new trust it is usually a decision for after its first year, not something to sign on day one.

What the company has to do once it exists

• The annual review. Each year, around the anniversary of registration, ASIC sends an annual statement. The company pays the annual review fee, usually within 2 months, checks its details, and fixes anything wrong. Changes to company details have to be notified to ASIC within 28 days whenever they happen.
• The solvency resolution. Within 2 months of the annual review date, the directors resolve whether the company can pay its debts as they fall due, unless it has lodged a financial report with ASIC in the past 12 months. A positive resolution is kept with the company records; a negative one has to be notified to ASIC within 7 days.
• Directors' duties. Directors must act in good faith and in the company's best interests, with care and diligence, make sure it can pay its debts on time, and prevent insolvent trading. In some cases a director can be personally liable for certain company debts.
• Records for 7 years. The Corporations Act requires written financial records that correctly record and explain the company's transactions, kept for 7 years after the transactions are completed. That includes transactions the company makes as a trustee.
• Taking money out. The company's money is not yours. A payment, loan or other benefit to a shareholder or their associate can be treated as an unfranked dividend under Division 7A unless it is repaid or put on a complying loan by the company's lodgment day. Our Division 7A guide explains how it works in 2026–27.
• The company tax return. A company lodges its own return every year and usually pays tax through PAYG instalments.

Fees

Set-up work is quoted as a fixed fee, agreed with you before we start. The quote depends on how many entities are involved and whether the structure is straightforward. ASIC's registration and annual review fees, and any other government charges, are separate. The government sets them, they change from time to time, and current amounts are on ASIC's fees page. How our fees work explains how we put a quote together.