Sole Trader business structures are quite easy and inexpensive to set up.
As a sole trader, you are personally responsible for all of the operations (including debts) of your business. You also pay tax personally on the profits at your marginal tax rate.
A sole trader can employ other people, however you, the sole-trader cannot be employed by the business.
Why would you choose a Sole Trader?
- Inexpensive to set up (you just need an ABN)
- Early stages of the business and you’re not sure if it will be a success (e.g. if you’re starting a business whilst still working as an employee elsewhere)
What else should you consider?
- Level of risk involved in the business operations
- Whether you want the ability to add another owner to the business
- Whether you want to access some government grants (most require an entity to be a company)