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Register the most suitable structure for your business

On this page

  • What is a trust?
  • Key factors for choosing this structure
  • Register as a trust

Use the Australian Business Licence and Information Service (ABLIS), a one-stop application that helps you find all the local, state and federal licences, registrations and permits you need.

Trust explained

A trading trust is usually an entity that holds property (capital) for certain beneficiaries. This type of business structure is formed when a gift or settlement is made to a trustee (a person or a company) on behalf of a yet-to-be-formed trust. A solicitor then draws up a Trust Deed setting out the trust's powers and formalising its administration.

While there may be ease of succession in a trust business structure, trading trusts are a complex and expensive business structure and are subject to higher compliance costs. Use our step-by-step guide below to determine if a trust is the right business structure for you.

Step-by-step: choose the best business structure for you

Key factors to consider

Tax registrations

  • Tax File Number : A trust must have its own Tax File Number (TFN) to use when lodging its annual tax return -  the trustee needs to apply for it on the Australian Business Number (ABN) application form. 
  • Australian Business Number: If the trust is carrying on an enterprise in Australia, the trustee must register for an Australian Business Number (ABN) for the trust.
  • Goods and Services Tax: If the trust is carrying on an enterprise, and its turnover is over $75,000 or more, it must register for Goods and Services Tax (GST). For non-profit organisations, the registration threshold is $150,000.

Employing people

Distribution of income, and taxation

  • Rather than shareholders, a trust has beneficiaries who are entitled to distributions of capital and/or income. These distributions are controlled by the trustee and form part of a beneficiary's personal income, subject to income tax and provisional tax. The ATO has more information on how a trust can file its tax returns.

Winding up a trust

  • A trust can be wound up and the assets distributed, but only where there is consent of the beneficiaries. Where beneficiaries are specified as a class (which is usual), or are children, it can be difficult to obtain consent.
  • If you're considering using this structure, you'll need to carefully consider the relevance of any tax savings and the potential difficulties involved in winding up.

Register as a trust

After considering the pros and cons, if you decide that starting a trust is the right choice, you'll need to:

  1. decide if you want to register your business name – this is only needed if you're using a name other than your personal name
  2. check that your proposed business name doesn't infringe on existing trademarks
  3. register a business name  
  4. get your solicitor to draw up a Trust Deed
  5. apply for the relevant licences and registrations.