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Alvarez & Paul Lawyers¶
Different types of business Structures¶
Level 19 37 Queen Street Brisbane QLD 4000 T: (07) 3368 9000 F: (07) 3368 9010 E: mail@a&p.com.au¶
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Business structures are described as being either incorporated or unincorporated. An unincorporated business structure does not create a separate legal identity from those who created it or are a part of the business. Every member of an unincorporated business is personally liable for the debts of the business. There are no legal formalities and an unincorporated business is easily and quickly set up. Examples of unincorporated business structures include sole traders, partnerships and joint ventures.¶
Sole trader¶
Conducting a business as a sole trader is the most basic type of business structure. There are no business statutory requirements apart from registering a business name if the business is operated under a name other than the individual’s own. However, depending on the profession or industry there may be statutory, licensing or education requirements that must be complied with.¶
Partnerships¶
A partnership is a common business structure because like a sole trader it is simple to set up. Quite often a partnership is formed from a successful sole trader’s business. Partners may be brought in to help share the costs of running a business or because joining up with others brings a particular type of expertise or knowledge. $ ^{1} $¶
Joint ventures¶
A joint venture is often created when individuals or parties want to work on a specific one-off project for profit together without merging businesses assets. For this type of business arrangement there is no need to establish a company or partnership. Usually a contract or agreement between the parties is created to govern the joint venture.¶
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Characteristics of joint ventures:
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no separate legal personality
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contractual relationship
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assets held as tenants-in-common in specified proportions
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divided management
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limited scope
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participants agree to act towards one another in good faith
1 Business.gov.au¶
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