From Sole Trader to Company: When Is It Time to Level Up Your Business Structure?

Running your biz as a sole trader is simple and cost-effective at first — but as things grow, so do your risks and tax obligations. Here's how to know when it's time to consider becoming a company.

1. You're Earning More Than You Expected

Once your income creeps up, the tax benefits of a company structure (flat 25% rate vs. personal marginal tax rates) can really start to add up.

2. You’re Hiring or Taking on Bigger Jobs

Liability becomes a bigger deal when you’ve got staff, contracts, or equipment involved. Companies offer more

protection than a sole trader setup.

3. You Want to Build a Legit Brand

A registered company with an ACN can make you look more professional — especially with suppliers, lenders, and clients.

4. You Need Flexibility With Income Distribution

Companies can distribute profits more flexibly (e.g., paying dividends), which can help with tax planning — especially if you're bringing family members into the business.

5. You’re Thinking Long-Term

Whether it’s succession planning or applying for finance, having a company structure gives you more options and a stronger foundation for growth.

Conclusion

Not sure whether to stick with sole trading or make the leap to a company? It’s not just a tax question — it’s a business strategy one too.

💼 Thinking of levelling up? Talk to SCE Tax Revolutions about the best business structure for your future.