How Smart Entity Structuring Sets Growing Businesses Up for Success 🚀

If you’re a business owner in growth mode, you’ve probably heard the phrase “structure is everything.” But what does that actually mean for your business? And how can the right entity structure help you protect your assets, minimise tax, and set your business up to scale with confidence?

Let’s break it down, bust some myths, and give you the clarity you need to make smart decisions for your business’s future. 

Why Entity Structure Matters (More Than You Think)

When we talk to ambitious business owners, most have one thing in common: they want to grow, but they also want to protect what they’re building. Here’s where entity structuring comes in:

• Asset protection: The right structure shields your personal assets from business risks.

• Tax efficiency: Smart structuring means you pay only what’s necessary, not a cent more.

• Flexibility for growth: The right setup makes it easier to add partners, investors, or even sell down the track.

• Succession planning: Planning ahead now means less stress later, for you and your family.

Common Structures (And How to Choose)

There’s no one-size-fits-all answer, but here are the most common structures we see for growing businesses:

1. Sole Trader

• Simple to set up

• Full control

• But: No asset protection, limited tax flexibility

2. Company

• Great for growth: Ideal if your net profit is above $120k–$140k, or you’re scaling fast

• Asset protection: Limits your personal liability

• Tax rate: Company tax rate (25% for small business entities)

• Flexibility: Easier to bring in partners or investors

3. Family Trust

• Distribute income: Flexibility to distribute profits to family members (and potentially save tax)

• Asset protection: Can help safeguard assets from business risks

• Great for: Family businesses, asset holding, and succession planning

4. Hybrid Structures

• Best of both worlds: Often, a company owned by a family trust

• Why? You get the operational benefits of a company, plus the flexibility and asset protection of a trust

Trading Company: Shares in Your Own Name vs Family Trust 🏢

This is where things get interesting for established businesses.

Shares in Your Own Name

• Pros: Simple, direct ownership, easy to understand

• Cons: Less asset protection, all profits taxed in your name (at your marginal rate), succession can get tricky

Shares Held by a Family Trust

• Pros: Distribute profits to family members (within the trust), potentially lower overall tax, added asset protection, easier succession planning

• Cons: Slightly more complex to set up and manage, but the benefits often outweigh the admin

Our take? For businesses with serious growth plans, holding shares via a family trust is often a game-changer. It’s not about hiding money or dodging tax—it’s about giving your business the flexibility and protection it needs to thrive.

When Should You Review Your Structure?

If any of these sound familiar, it’s time to chat with an accountant:

• Your business is making (or about to make) over $120k–$140k in net profit

• You’re thinking about bringing on a partner or investor

• You want to protect your personal assets from business risks

• You’re planning for succession, exit, or sale

• You haven’t reviewed your structure in the last 2–3 years

Pro tip: The best time to review your structure is before you hit a major growth milestone—not after!

Busting the Myths 🧐

“It’s too expensive or complicated.”
With the right advice, setting up a company/trust structure is straightforward and the long-term savings (and protection) far outweigh the initial outlay.

• “I’ll lose control.”
  Not true! You can remain the director and decision-maker, while still enjoying the benefits of smarter structuring.

• “Only big companies need this.”
  Actually, businesses of all sizes can benefit—especially if you’re growing fast or have big plans.

Ready to Future-Proof Your Business? 💡

Smart entity structuring isn’t about ticking boxes—it’s about setting your business up to thrive, not just survive.

If you’re serious about growth, asset protection, and building a business that lasts, chat with your accountant.