Three years ago, when Michael was young, kind of single and life was fairly uncomplicated….

Michael is a Physiotherapist

Michael established his own physiotherapy clinic. Uncertain about how a new clinic would go and without seeking professional advice, Michael registered an ABN under his own name, ie sole trader, rented a room in a local medical related centre and started his new business enterprise.

Scaling up

Three years later Michael’s physiotherapy clinic is growing.
During a consultation with his accountant it was suggested the practice be restructured into either a company or trust structure.
Michael chose a trust structure with a corporate trustee for the following reasons:

  • Michael is now engaged to be married. His fiancé is working but as they are planning to have a family she was planning to cease work.
  • A trust structure will reduce exposure of personal current and future assets – eg family home.
  • A trust structure will provide greater flexibility in tax planning – eg splitting income with family members.

A trust structure also provides greater scope for further tax planning by interposing other entities, eg company or trust, as a beneficiary.



  • Replacing the sole trader structure means new ATO registrations for TFN, ABN, GST, PAYGW.
  • All existing business related contracts associated with the sole trader need to be reviewed and new contracts arranged – eg commercial lease, insurance policies etc.
  • All existing financial arrangements need to be reviewed – eg. new bank accounts, new merchant facilities with banks and medical funds, loans etc.
  • Changes to existing payroll – eg new payroll system, new SG arrangements, new work cover policy.


Pain and costs


Although Michael now has a business structure that will work for him now and into the future, the change over process has some pain and costs attached.


Loss Back Tax Offset For Companies – 2021

The new Loss Back provisions for companies commences with lodgment of 2021 tax return. The Loss Back provisions allows a company to offset a current year loss against a previous year profit, generating a refundable tax offset for the current year for tax paid in a...

How to register a business or trading name

If you're wondering how to register a business or trading name, this may help point you in the right direction. Australia's national business names register is managed and maintained by the Australian Securities Investment Commission (ASIC). For the uninitiated,...

Stories From The Trenches – Business Principles

Today I want to share a brief story of a young couple operating a business. It is a real story about real clients that highlight planning principles in small businesses. Case Study Some years ago, a young couple operating a business asked me to look after their tax...

Trust with Individual Trustee Case Study

TRUST WITH INDIVIDUAL TRUSTEE CASE STUDY INDIVIDUAL TRUSTEE   After receiving his trade certificate and gaining some valuable experience as a sub-contractor, Les decided to start his own plumbing business .....     Les is a plumber   Les seeks...

Business Partners Non Related Parties Case Study

BUSINESS PARTNERS CASE STUDY THE PARTNERS ARE NON RELATED PARTIESJoe and Adam are plumbers who have both worked together on various construction sites....Long Term Friendship Joe and Adam have been building a great long term friendship over the years and decide to...

What is the Australian Business Register (ABR)

What is the ABR? All businesses with an ABN are listed on the ABR. What's on the ABR? The information available on the ABR is limited as follows: Entity Name - The name of the entity, ABN Status - Active or not + history of dates, Entity Type - Company; trust;...

Trust with Corporate Trustee Incorporating Corporate Beneficiary Case Study

TRUST WITH CORPORATE TRUSTEE CASE STUDY INCORPORATING A CORPORATE BENEFICIARY   Steven is self-employed in the civil construction earth moving industry and he is operating as a sole trader....     Steven is a Single Dad   Steven is single and has...

What Registrations Do I Need to Start a Business

What Registrations Do I Need to Start a Business When starting a business there are some miss-conceptions about what registrations are required to start a business. Whilst there are some specific registration and or accreditation requirements, for example; builder...

Buying an Investment Property in a Pty Ltd Company

A recent determination by the ATO, TD 2021/2, confirms company Capital Gains Tax (CGT) concessions apply to "active" business assets only. Income from rental properties is defined as "passive." Accordingly, "passive" rental assets are excluded from the company CGT...

Tool Kit For Starting a Business

Companies Direct has developed a kit for starting a business that has helped thousands of people. It covers topics like: What steps are involved; What business structure to use, How to get started on the right foundations; and It will potentially save you from costly...

Director Identification Number (DIN) Starts on 1 November 2021.

The new DIN regime starts on 1 November 2021. What is a DIN? A director ID is a unique identifier, like an individual’s tax file number. The purpose is to verify a director’s identity, preventing false or fraudulent director identities. When? If you are an eligible...

Tax Benefits of Using a Pty Ltd Company For Your Business Structure:

A tax benefits of using a company as a business structure is Franking Credits. How do they work? When a company makes a profit, it pays tax at 27.5% (small companies tax rate). Company tax paid is recorded in the company's "Franking" account. When shareholders receive...

Pin It on Pinterest

Call Now ButtonCall us