Getting your business structure right from the start saves you money and complexity later.
Pros: Simplest to set up (ABN only, no ASIC fees), no separate tax return required (business income goes on your personal return), full control over the business, and minimal ongoing compliance. Cons: Unlimited personal liability (though risk is low for resellers), income taxed at your personal marginal rate (up to 45% plus Medicare levy).
Pros: Separate legal entity (limited liability), flat tax rate of 25% for base rate entities (lower than top marginal rates), and easier to bring in partners or investors. Cons: ASIC registration ($576 annually), separate company tax return ($500-1,500 to prepare), potential double taxation when extracting profits as dividends, and more complex compliance.
The tax saving from a company structure typically becomes meaningful when your reselling profit exceeds $100,000-$150,000 per year. Below that level, the additional costs of running a company (ASIC fees, accountant fees for company returns, potential fringe benefits complications) often outweigh the tax savings. Most resellers should start as sole traders and only consider incorporating when profits are consistently high. Discuss with your accountant before making the switch. See our sole trader guide and tax return guide.
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