Sole trader or company: which should a new business pick?
Written by Jack Harrington and Gabriel Pozo, the founders of Urban Media, Melbourne. Updated .
Your structure decides who is personally responsible if the business owes money, how you are taxed and what you register. It is worth settling before you spend on a name, a logo or a website.
This is general information, not legal or tax advice, checked against business.gov.au, the ATO and ASIC on 11 October 2026. If you are unsure, the ATO recommends talking to a registered tax agent or a trusted business or legal adviser.
Sole trader
The cheapest and quickest to set up, and you keep full control. The catch is liability: a sole trader's liability is unlimited, so personal assets in your name can be exposed to business debts. You report the income in your own tax return.
Company
A company is a separate legal entity, so its members have limited liability and are generally not personally responsible for its debts. Directors still have duties. They can be liable for their own actions and, in some cases, certain tax and super debts. It costs more and takes more admin than being a sole trader.
Partnership and trust
In a partnership each partner has unlimited liability for the partnership's debts. A trust puts responsibility on the trustee and is the most complex and costly to set up. Most first-time founders choose between sole trader and company.
You can change later
A common path is to start as a sole trader and move to a company when you hire people, take investment or own assets. business.gov.au has a page on changing structure, and it is worth planning for so the move is tidy.
Why this comes before the brand
Your structure decides whose name goes on the registrations, the invoices and the website footer. Pick it first, then check the name, then build the brand.
Where Urban Launch fits
Structure is a decision for you and your accountant. When it is made, Urban Launch builds brand, website, content and systems in order, by one Melbourne team.
Official sources
This guide was checked against these official pages on 11 October 2026. Rules change, so confirm on the source before you rely on a detail.
More guides for new businesses
- Logo or website first for a new business
- What to do after registering an ABN
- New business launch checklist, Melbourne
- How to name a business in Australia
- Business name vs company name in Australia
- Do I need a website for a small business
- What is a brand identity for a small business
- Brand guidelines for a small business
- How to get your first customers as a new business
- Google Business Profile for a new business
- How much a new business should spend on ads
- Website checklist before you launch a small business site
- What photos a new business needs
- Landing page or website for ads
- Social media profiles for a new business
- How to start a business in Melbourne
- How to start a clothing brand in Australia
- How to register a brand name in Australia
- Do I need an ABN to start a business in Australia
- Do I need to register for GST
- How to choose a .com.au domain name
- How to get a logo for a new business
- Business email for a new business
- Privacy policy for a small business website in Australia
- What to post on social media when you start a business
- Setting up a business in Victoria
All of them are on the guides page.
Who is behind this
Urban Launch is built and run by Urban Media (ABN 28 169 446 902), a Melbourne studio founded by Jack Harrington and Gabriel Pozo. Urban Media makes video, design and websites for clients including Box Hill United, Brighton Grammar and Porsche Club Victoria.
If you want to talk to the people doing the work, call 0456 785 904. More about who we are, and how to check us, is on the About page.
Common questions
- Is a sole trader personally liable for business debts?
- Yes. business.gov.au describes a sole trader's liability as unlimited, so personal assets in the owner's name may be exposed.
- Does a company protect me from personal liability?
- Generally it limits the members' liability because a company is a separate legal entity, but directors can still be liable for their own actions and in some cases certain tax and super debts.
- Can I start as a sole trader and become a company later?
- Yes. A common move is from sole trader to company when you hire employees, take on investment or own assets. See business.gov.au on changing your business structure.
- Which structure is cheapest?
- Sole trader is the cheapest and simplest to set up, according to business.gov.au's comparison.
Start with a Launch Call
Live and generating enquiries within 45 days, or we keep working at no extra cost until you are. The Launch Call is where we check it is the right fit before we book anything in. For a real example, read the Airwize case study (12 conversions, meaning leads that became sales, in the first month of Google Ads from $70 of ad spend, our figures). You can also read how a launch package compares with hiring separately, or go to the packages and prices on the homepage.
More: Brand and website package, Melbourne, Startup package for a new business, Melbourne, Branding, website and photography package, Melbourne.