You are considered a sole trader when you’re self-employed and exclusively own your business. According to the Australian Bureau of Statistics, a 2.4% (18,941) increase in sole proprietors to 803,687 total. ( Reference period July 2020 - June 2024).
Sole Trader is the most popular type of business structure, as it’s very simple to start and tends to be minimal in paperwork.
Running a business on your own is not easy – but it can be hugely rewarding, and can allow you to start your new venture.
But first thing, it’s important to understand the benefits and drawbacks of choosing to operate as a sole trader. This type of structure offers many advantages:
You’re in full control of your business,
Are capable of employing people and can enter into contracts.
When it comes to paying taxes, you do so on your profits, which means you keep whatever is left.
When it comes to the degree of privacy, being a sole trader will give you privilege. You can keep quiet and don’t have to make anything public.
As a sole trader, according to ATO ( Australian Taxation Office), you are responsible for paying your worker’s superannuation, known as Super Guarantee. You don't have to pay super guarantee for yourself but you can choose to make personal super contributions as a tax minimisation strategy and save for your retirement.
But it has also a pitfall, you have unlimited liability and your personal assets can be on the line if the business fails. This is because your business is not a separate legal entity, so you’re liable for any debts incurred – if you start your business with a significant amount of debt as startup costs.
The first step toward running your business as a sole trader is avoiding common pitfalls. At Casey Taxation, we specialize in helping businesses like yours navigate the complexities with strategic insights and actionable solutions. Whether you’re starting or looking to improve, our expertise can guide you toward success.
Contact us today to schedule a consultation. Let's work together to make your business thrive!
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