This chart is intended to provide a quick reference to factors considered relevant in the selection of trading and investment structures.
| Individual | Partnership | Discretionary trust | Unit trust | Company | |
| Exposure to liability | Unlimited | Unlimited, as well as joint and several | Limited — subject to trust deed | Limited — subject to trust deed | Limited |
| Control over assets | Absolute | Joint | Uncertain | Collective | Separated |
| Accommodation of general wealth creation | Wealth at risk | Wealth at risk | High level of asset protection | Wealth at risk | Company wealth |
| at risk | |||||
| Ability to obtain finance | Good | Good | Reasonable | Good | Good |
| Disclosure of results | None | None — other than between partners | None | None — other than between unit holders | Disclosure requirements in accordance with the Corporations legislation |
| Compliance costs | Low | Low | Medium | Medium | Medium — high |
| Exposure to personal factors | Moderate to high | Moderate to high | Moderate | Moderate — low | Low |
| Employee v proprietor | Proprietor | Proprietor | Employee | Employee | Employee — |
| Director | |||||
| Accommodation of succession planning | Low | Low | High | Moderate | Moderate |
| Accommodation to estate planning | High | Moderate — low | High | Moderate | Moderate — high |
| Ability to restructure | Low | Low | High | Moderate | Moderate |
| Immediate and ultimate rates of tax | Personal marginal rates | Personal marginal rates | Beneficiary rates — marginal or corporate | Beneficiary rates — marginal or corporate | Initial company rate — top up or refund to personal rates |
| The tax base | Business expenses limited | Business expenses limited — some | Normal — ability to provide benefits to associates | Normal — ability to provide benefits to associates | Normal — benefits to employees and shareholders subject to FBT and Div 7A |
| further financing expenses | without FBT or Div | without FBT or Div | |||
| 7A | 7A | ||||
| Access to concessions generally | Good | Good | Moderate | Initially good — but subject to claw-back | Initially good — but subject to claw-back |
| Access to 50% CGT discount | Yes | Yes | Yes | Yes (post 1 July 2001) | No |
| Access to small business concessions | Yes | Yes | Yes — subject | Yes — subject | Yes — subject |
| to “significant individual” test | to “significant individual” test and claw-back | to “significant individual” test and claw-back | |||
| Income diversion and accumulation | Little opportunity | Moderate opportunity | High opportunity | Moderate opportunity | Low to moderate opportunity |
| Incidence of tax losses | Personal | Partner level | Quarantined in trust | Quarantined in trust | Quarantined in company |
| Ability to carry forward tax losses | Unlimited | Unlimited | Subject to complex carry forward rules | Subject to complex carry forward rules | Subject to complex carry forward rules |
| Incidence of financing costs | Personal | Partner level | Trust | Trust or unit holder | Company or shareholder |
| Cash flow considerations | Good | Good — subject to agreement | Good — subject | Good — subject | Poor — subject to distribution or Div |
| to distribution or loan | to distribution of loan | 7A commercial loan | |||
| Private and business expenses | Mixed | Mixed | All business | All business | All business |
| Effect on social security entitlements | Direct | Direct | Possible | Direct | Direct |
| Alienation of personal income rules | Do not apply | Do not apply | Potentially apply | Potentially apply | Potentially apply |
| Super contributions | Deductible — subject to caps | Deductible — subject to caps | Deductible — subject to caps | Deductible — subject to caps | Deductible — subject to caps |
| Possible application of anti-avoidance provisions | Low | Low — medium | Medium — high | Medium | Low |
This is a checklist ONLY. There are numerous taxation and non-taxation considerations which flow from the content above, which require consideration and analysis in reaching a decision as to an appropriate structure for individual circumstances.
