Start a Sole Trader in Australia: Procedure & Advantages

This guide will cover how to register as a sole proprietorship in Australia, whether you are an aspiring company owner or a contractor looking to start your sole trader organization.


    Note: This form is not for job seekers.

    Table of Contents

    start a sole trader in australia

    Are you prepared to launch your own company and register as a sole trader in Australia? We are here to provide you with a comprehensive guide that outperforms all others in terms of both quality and content. 

    This lesson will teach you how to register as a sole proprietorship in Australia, whether you are an aspiring company owner or a contractor looking to start your sole trader organization.

    What is a sole trader business in Australia?

    A sole trader, also known as a sole proprietor, is a type of business organization in which you are the single owner and operator. Simply said, it is your company, and you have complete control over every aspect of it. While the phrase “sole proprietor” refers to the number of owners, it does not exclude you from employing employees to assist with business operations. Many small businesses start as sole proprietorships, and it’s also a popular choice for contractors and self-employed individuals.

    How to Set Up a Sole Trader Business in Australia

    There are numerous processes involved in registering as a sole trader in Australia:

    Get a Tax File Number (TFN) 

    Your tax filing number (TFN) is required to pay income tax. It distinguishes between your personal and corporate earnings.

    Make an application for an Australian Business Number (ABN)

    An ABN is a unique 11-digit identity for your company that allows you to engage with government institutions and the tax office more easily. You may get an ABN via the Business Registration Service.

    Make a business name registration

    If you intend to use a business name other than your own, you must register it with the Australian Securities and Investment Commission (ASIC) on a national level. This enables you to conduct business in any state or territory.

    Fill out the GST registration form

    If your annual revenue is estimated to be $75,000 or more (or $150,000 for not-for-profits), you must register with the Australian Taxation Office (ATO) for Goods and Services Tax (GST). GST registration permits you to reclaim the GST you paid on business-related goods and services.

    Advantages of Being a Sole Trader in Australia

    Here are some of the advantages of operating as a sole trader in Australia:

    • Simplified Taxation: Business income and expenses are recorded on a separate business and professional items schedule with your tax return.
    • Fewer Reporting Obligations: The administrative load is smaller for sole proprietors, making it easier to handle the financial side of your organization.
    • Ownership entails having entire control over your company, from earnings to decision-making.
    • Low startup costs: It is less expensive to start a business as a lone proprietor. You will not have to deal with the various costs connected with other business models.

    Disadvantages of being a sole trader in Australia

    The following are the drawbacks of being a solo trader in Australia:

    • Personal Liability: As a sole proprietor, your assets are at risk if the company incurs debts or obligations.
    • Financing Options Are Limited: If you want to attract investors, you may need to modify the structure of your company.
    • Selling the Company: Selling a sole-trader firm can be tough, especially if it is a niche because it can be difficult to find a buyer prepared to take over your unique concept.
    • Superannuation Accountability: You are in charge of superannuation contributions for yourself and any workers.

    Additional registration responsibilities

    Following the completion of the first registration stages, you may be assigned extra duties depending on the nature of your organization. If you have employees, you must consider employee entitlements, workers’ compensation, and tax duties. You may also need special licenses, permissions, or professional certifications depending on your business.

    • Employing Staff: If you have staff as a sole trader, you must understand their entitlements, supply workers’ compensation insurance, and handle your tax and superannuation responsibilities, including PAYG withholding.
    • Professional Qualifications or Registrations: Professional qualifications or registrations may be required depending on the nature of your business. Electricians, for example, must be registered and licensed in their particular states or territories. Specific criteria should be confirmed with your industry bodies.
    • Licences and permissions: To lawfully conduct your business, you may need to get several licenses and permissions from government agencies. Permits for activities such as food and beverage service, land use and zoning, and basic business operations are examples of these. The Australian Business Licence and Information Service can advise you on the necessary permissions.


    In Australia, registering as a sole trader is a reasonably simple procedure, but it is critical to understand the legal and financial obligations that come with it. This guide provides you with the knowledge you need to take the first step toward running your own business, whether you’re a fledgling entrepreneur or a contractor.

    Please bear in mind that everything offered here is intended to be general, and you should seek the guidance of a professional for specialized business advice. It is always a good idea to get professional advice from OnDemand International‘s expert team before acting on any information offered.