Company vs Trust Decision Checklist for Buying a Business in Australia
When you're buying a business in Australia, the question of company vs trust comes up early — usually when your accountant asks what entity you're buying into, and you realise you haven't thought about it. Choosing the wrong structure doesn't always blow up the deal, but it can cost you money on tax, complicate your bank application, and create headaches when you eventually sell.
This checklist helps you work through the decision systematically. It covers five areas where your choice of structure genuinely matters: tax flexibility, bank lending, asset protection, exit planning, and practical setup. Answer each section honestly — your situation determines the right answer, not a generic recommendation.
For the full explanation of how each structure actually works, read the full guide to company and trust structures for buyers. If you're also thinking through how you'll finance the acquisition, the Bank Lending Criteria Checklist is a useful companion.
Why this decision matters before you sign
Most buyers get this backwards. They find a business they like, agree on a price, sign a letter of intent — and then ask their accountant what entity to use. The accountant then has to work backwards from a deal that may have been structured the wrong way.
A broker I worked with told me about a buyer who'd negotiated hard for a share sale (to get a lower price), then discovered his family trust wasn't set up in a way that allowed it to hold the shares cleanly. Three weeks from settlement, they were scrambling to restructure — and paying legal fees to fix something that should have been sorted in week one.
The structure decision has three downstream effects you need to consider upfront:
-
It affects your bank application. Some lenders are much more comfortable with a company than a trust. If you're planning to get bank finance to buy a business, your structure choice affects how clean the application looks and which lenders will consider you.
-
It sets your tax position for years. A company pays a flat 25% on profits (for base rate entities). A discretionary trust can distribute income flexibly across family members. The difference can be $20,000–$50,000 a year on a business generating $300,000 in profit.
-
It determines your CGT treatment when you exit. Trusts get the 50% CGT discount that companies don't. On a $500,000 gain, that's a $125,000 difference in tax.
This checklist is designed to be completed with your accountant and finance broker present (ideally before you've signed anything more binding than a confidentiality agreement).
This is covered in Module 6 of the Playbook — the full module walks through financing structures, deal negotiation, and settlement mechanics in sequence.
Get the full checklist: The gated section below includes the complete decision framework across all five areas, plus a scoring guide that tells you which structure to use based on your answers.
Get the free decision checklist
Enter your email to unlock the full resource. You'll also get weekly insights on buying businesses in Australia.
No spam. Unsubscribe anytime.