A sole trader is the simplest business structure. The structure is inexpensive to set up because there are few legal and tax formalities. If you operate your business as a sole trader, you trade on your own and control and manage the business. You are legally responsible for all aspects of the business - debts and losses cannot be shared.
Knowing the main features of a sole trader business structure may help you decide if this structure is best for your business.
Tax file number (TFN)
As a sole trader, you use your individual tax file number (TFN) when you lodge your income tax return.
Australian business number (ABN)
If you carry on an enterprise in Australia as a sole trader, you can apply for an ABN for your business and use this number for all your business dealings.
Goods and services tax (GST)
You can register for goods and services tax (GST) if you carry on an enterprise. You can apply for GST registration on the ABN application form. You must be registered for GST if your annual GST turnover is $75,000 or more.