Sole Trader, Company or Trust? The Decision That Can Make or Break Your Agency
One of the first legal decisions agency owners make is often one of the most important.
How should you structure your business?
Many agency owners default to whatever feels easiest.
They start as a sole trader because it is quick.
Others set up a company because someone told them it was “more professional.”
Others hear trusts are great for tax and asset protection but do not fully understand how they work.
The reality is there is no one size fits all answer. The right structure depends on your risk profile, growth plans, tax strategy, succession goals, and whether you plan to build an agency that can eventually be sold.
We regularly help agency owners restructure after they realise their original setup no longer works.
That is usually far more expensive than getting it right from day one.
What a Sole Trader Structure Looks Like
A sole trader structure is the simplest option.
You and the business are legally the same entity.
You operate under your ABN and report business income through your personal tax return.
Pros:
Cheap and easy to set up
Minimal compliance obligations
Full control over decision making
Risks:
No separation between personal and business assets
You are personally liable for business debts
If someone sues your business, your personal assets may be exposed
Harder to bring in partners
Can become messy when selling later
This structure may work for someone testing a business idea or operating very small scale.
It often becomes risky once an agency grows, hires staff, manages trust money, or builds meaningful revenue.
What a Company Structure Looks Like
A company is a separate legal entity registered with ASIC.
This means the company owns the business assets and enters contracts in its own name.
For many agencies, this becomes a more practical growth structure.
Pros:
Better asset protection than sole trader structures
Easier to bring in shareholders
Easier to sell shares later
Better long term growth flexibility
Company tax rate may apply (currently 25% for eligible base rate entities as at 2026, subject to accountant advice)
Risks:
Higher compliance obligations
ASIC annual obligations
More administration costs
Director duties apply
This is often where growing agencies land.
What a Trust Structure Looks Like
Trusts are often misunderstood. A trust is not actually a business entity.
It is a legal relationship where a trustee holds assets for beneficiaries.
Many agencies use discretionary trusts with a corporate trustee for asset protection and tax planning flexibility.
Pros:
Potential asset protection benefits
Income distribution flexibility
Can assist with succession planning
Useful for family owned businesses
Risks:
More expensive to establish
Higher accounting and legal complexity
Trust distributions must be handled correctly
Not ideal for every agency
Trusts can be powerful.
They can also create headaches when poorly structured.
The Real Question: What Are You Building?
This is where many agency owners ask the wrong question.
They ask: “What is cheapest?”
The better question is: “What am I trying to build?”
If you want a lifestyle business with low risk, a sole trader structure may work early on.
If you want to scale, hire, acquire rent rolls, bring in shareholders, or sell your agency one day, a company structure may make more sense.
If asset protection, succession planning, and family wealth planning are major priorities, a trust structure may be worth exploring.
Often the best answer involves multiple entities working together properly.
Case Studies: What We See in Real Life
Case Study 1: The Sole Trader Who Grew Too Fast
An agency owner started as a sole trader because it was fast and cheap. Within three years, they had multiple staff, significant recurring management income, and growing legal exposure. They were shocked to learn their personal assets were exposed.
We helped restructure the business into a company model and put stronger protections in place.
Lesson: Cheap at the beginning can become expensive later.
Case Study 2: The Agency With No Succession Plan
A family owned agency operated through a company structure but had no shareholder agreement and no clear succession plan. When one director wanted to retire, the business faced significant conflict.
We helped restructure ownership arrangements and create a clearer succession pathway.
Lesson: Your structure should support your exit strategy.
Case Study 3: The Trust Structure Done Wrong
An agency owner set up a trust after hearing it would “save tax.” They did not understand trustee obligations or proper distributions. Their accountant identified major issues.
We worked alongside their accountant to restructure things properly and reduce future risk.
Lesson: Trusts can be powerful, but only when set up properly.
Key Takeaways
• There is no universal “best” structure
• Sole trader structures are simple but carry personal risk
• Companies offer stronger growth flexibility
• Trusts can help with asset protection and succession planning
• Restructuring later is often more expensive than getting it right upfront
Next Steps
The right business structure should protect your assets, support your growth goals,
and make future succession easier.
We help agency owners choose the right legal structure from day one
and fix existing structures when they no longer fit.
Frequently Asked Questions (FAQ)
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Not always. It may work early on, but many agencies outgrow it quickly.
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Not necessarily. It depends on tax, growth, succession, and asset protection goals.
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Yes, but restructuring can trigger legal, tax, and operational complexity.
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No. Many everyday business owners use trusts for legitimate planning purposes.
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Often a company structure creates cleaner sale opportunities, but every business is different.
Jonathan Green – Partner, O*NO Legal
Jonathan Green is one of the Partners at O*NO Legal with a strong passion for both the real estate and legal industries. With over 15 years of experience, he has led his own firm, worked for a large national law firm, and served as Partner and Director of a busy Victorian real estate agency. As a Licensed Estate Agent, Jonathan understands the real-world challenges his clients face, having worked directly within the industry. After selling his real estate business in 2021, he returned to full-time legal practice, combining his expertise in law and real estate.
Jonathan specialises in commercial law, property transactions, developments, rent roll sales, and leasing and conveyancing matters. He holds a Bachelor of Laws from La Trobe University, a Bachelor of Arts from the University of Melbourne, and is a Graduate of the Australian Institute of Company Directors.
Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.