As a rule of thumb, many importers choose to establish a Pty Ltd registered company, as sole trader and partnership structures do not offer enough legal protection for the owner(s). New Australian Consumer Laws place the onus of responsibility squarely on the importer, so it is critical your chosen business structure fits your risk management strategy.

Before you start your import export business, you should consider the advantages and disadvantages of each type of business structure.

Considerations include:

1. Tax effectiveness

2. Liability

3. Personal circumstances

Sole trader
With a sole trader business structure there is no separation between the legal existence of the business from the owner. A sole trader is responsible for the liabilities of their import export business. The owner needs to report their import business income on a personal income tax return, along with any other income they earn.

Pty Ltd Company

The preferred business structure for importers, a company is a completely separate legal entity from the shareholders that own and/or run it. A director of an importing company has additional reporting and legal obligations and is required to lodge a separate company income tax return from the owners personal tax return.

Become a member of My Import Label and find out more about appropriate business structures for import export businesses.