Sole Trader, Company, or Trust?
The Pros and Cons of Each Business Structure for Beauty Professionals
When you first set up your beauty business, choosing a business structure probably wasn’t the most exciting part. Let’s be real — it’s way more fun to pick your salon name, plan your services, and style your Instagram grid. But your business structure? That’s the foundation everything else sits on. And getting it right matters — big time.
Whether you're just starting out or you’ve been running for a while and wondering if it’s time to level up, this blog will break down the pros and cons of the most common business structures in Australia — so you can make smart, informed decisions about your future.
Why Your Business Structure Matters
Your structure affects:
How much tax you pay
How you're legally protected
What happens if something goes wrong
How easy it is to grow, hire, and get funding
How you get paid and access your profits
So, whether you’re a mobile lash tech, a solo salon owner, or planning to open a multi-room space — your structure should support your goals, not hold you back.
Sole Trader
This is the most common starting point for beauty professionals.
Pros:
✅ Simple and cheap to set up (just get an ABN)
✅ You keep all the profits
✅ Easy to manage without a lot of admin
Cons:
❌ You’re personally liable for everything (if someone sues, they sue you)
❌ Limited tax benefits — you’re taxed as an individual
❌ Can look less “official” when applying for loans or funding
❌ Harder to scale or separate business from personal finances
Perfect for: New beauty professionals testing the waters or keeping things small.
Company (Pty Ltd)
This structure gives you a separate legal entity — the business is its own ‘person’.
Pros:
✅ Limited liability (your personal assets are better protected)
✅ You can pay yourself a wage and claim business tax deductions
✅ Looks more professional and credible to clients, banks, and suppliers
✅ Easier to grow, employ staff, or bring in business partners
Cons:
❌ Costs more to set up and maintain (ASIC registration, accounting, payroll)
❌ You can’t take out profits freely — there are rules around dividends or salaries
❌ Requires more admin (annual reviews, company tax returns, etc.)
Perfect for: Business owners looking to grow, protect themselves legally, or build a brand that goes beyond them.
Trust (Discretionary or Unit)
This structure is more complex and usually used for asset protection or family businesses.
Pros:
✅ Flexible income distribution (e.g. to family members)
✅ Tax-effective in some cases
✅ Can protect assets if structured correctly
Cons:
❌ Expensive to set up and run
❌ Requires a trustee and formal trust deed
❌ Not easy to manage without an accountant
Perfect for: Advanced business owners with high profits, family investments, or specific legal needs (only under professional advice).
So… Which One Is Right for You?
There’s no one-size-fits-all. But here’s a rule of thumb:
Just starting out? Begin as a sole trader and revisit once you're earning consistently.
Planning to grow or build a brand? A company structure is usually the best next step.
Complex family/business goals? Only consider a trust with expert legal and financial advice.
Bottom Line
Your business structure is one of the most important decisions you’ll make — and you don’t have to make it alone.
At The Beauty Boss AU, we help beauty professionals not only build a business they love, but one that’s protected, profitable, and ready for growth.
Ready to get clear on your business structure?
Contact us for a free discovery chat and let’s talk through your options.
Because the right structure now?
Can save you thousands — and set you up for the success you deserve.