AUSTRALIAN

Structuring your business ownership for asset protection

By Joshua Boorman · Published · QLD posts

In shortIn Australia, there are many different ways you may structure your business ownership. We discuss below some of the considerations when structuring your business ownership for asset protection. Some of the common structures may be used together to create a stronger ownership structure.

  • Common Structures in Australia
  • Discretionary Trust
  • Superannuation Fund

Australian law · law checked 21 Oct 2026

What's on this page

In Australia, there are many different ways you may structure your business ownership. We discuss below some of the considerations when structuring your business ownership for asset protection.

Common Structures in Australia

Common structures for business ownership in Australia include:

  • Sole Trader
  • Partnership of Individuals
  • Company
  • Discretionary Trust
  • Unit Trust
  • Superannuation Fund

Some of the common structures may be used together to create a stronger ownership structure. For example, a company may be incorporated to act as the trustee of a trust, or a discretionary trust may hold shares in a company. Any of these structures may participate in a joint venture.

It may also be desirable to use more than one of these structures to separate trading risks from the business assets. For example, incorporating one company to hold the trading risk and another to hold assets, such as the intellectual property. Provided that suitable documentation is put in place, this can protect business assets from trading risk, should the trading company become exposed to a claim.

Generally speaking, where there is a corporate trustee (i.e. the trustee is a company, not an individual), a discretionary trust or a superannuation fund provides the greatest level of asset protection out of the above common structures.

Discretionary Trust

Beneficiaries of a discretionary trust usually have no fixed entitlement to the value of the trust fund until such time as the trustee attributes value to them. Where the trust deed is appropriately worded, beneficiaries are often protected from business debts. It’s important to note that the trustee is personally liable for business debts, but will be indemnified out of available trust assets.

Superannuation Fund

In the context of a superannuation fund, the beneficiaries’ accounts are usually protected from the creditors of the beneficiary. Lenders of a superannuation fund have no recourse against the fund, only against a particular asset.

Unit Trust

Again with a unit trust, where the trust deed is appropriately worded, unit holders are often protected from business debts, however the value of their units in the unit trust will be available to their creditors on bankruptcy. Again the trustee is personally liable for business debts, but will be indemnified out of available trust assets.

Company

With a company, similar to a unit trust, the shareholders are protected from the company debts, but the value of their shares will be available to their creditors on bankruptcy. Directors can also be personally liable if they are trading while the company is insolvent. For this reason, careful consideration should be given to who should be appointed as the company directors.

Partnership of Individuals & Sole Trader

The partnership of individuals and sole trader structures offer no asset protection and are not separate legal entities to the individuals. Due to their joint and several liability, individuals operating under the partnership structure may also be exposed to their other partners’ debts. In both of these structures, non-business assets may also be exposed. Insurance can be used to provide some protection to the individuals.

A partnership of discretionary trusts is also an option to provide a greater level of asset protection than a partnership of individuals, however this is a less common structure.

Note on personal undertakings to pay a company’s debts

It’s important to note that personal undertakings to pay a company’s debts signed by the individuals behind business structures will expose those individuals to personal liability for those debts.

When setting up your business structure, it’s important to ensure that you also put in place suitable legal documentation to tie the structure together. For example, where you have set up a separate legal entity to own assets like intellectual property, it’s important to then document a licence between the trading entity and the asset holding entity to enable the trading entity to use the intellectual property.

Where there are multiple founders, you should also consider putting in place agreements between yourselves (or your nominees if applicable). Depending on the structure you decide on, this might be for example a partnership agreement, a shareholders agreement, a unit holders agreement or a shareholders and unit holders agreement. These agreements should include appropriate succession provisions or a separate buy / sell agreement should also be entered into.

Other considerations when structuring your business ownership

Each of the structures should be considered not only in the context of asset protection, but also in the context of their tax advantages and disadvantages, their set up and running costs, their flexibility, control, growth and succession plans, and the suitability for the business of which it will own and operate. Your business structure should be decided on after consultation with both your Accountant and your Lawyer.

We can advise you on which structure might be suitable for you, as well as assist you in establishing the structure and drafting any supporting legal documentation required. Contact us on 1300 941 900 to speak to our team.

FAQs about this article

What does “Structuring your business ownership for asset protection” cover?

In Australia, there are many different ways you may structure your business ownership. We discuss below some of the considerations when structuring your business ownership for asset protection.

What is one point to take away?

Some of the common structures may be used together to create a stronger ownership structure.

Is this article legal advice?

No. It is general information published on 29 April 2019. Call 1300 941 900 or make an enquiry about legal representation for advice on your own situation.

Sources and date checked

Sources and references for this page, checked 21 Oct 2026.

This page is general information about Australian law only. It is not legal advice. Every matter turns on its own facts.

Enquire about legal representation

Enquire about legal representation

Call 1300 941 900 or make an enquiry about legal representation.

What to have ready

  • Court & next listing date: Which court is on your paperwork and when your matter is listed.
  • Charge or reading (if known): Tell us the charge or reading if you have it — you do not need your full police facts yet.
  • Work & driving needs: Let us know if you rely on your licence for work or family responsibilities.
No obligationConfidential
Boorman Lawyers TV

Real court days, NSW & QLD

Behind-the-scenes footage and case discussions from court days across New South Wales and Queensland.

Visit Boorman Lawyers TV →
Country to city — on the road to court (full 24s cut)
Courts we attend

Find your court

Search for your courthouse to learn more about our legal services in your area.

Need advice about your agreement or business?

Talk to us about legal representation and advice.

Call 1300 941 900
Mon–Fri 8:30am – 6:00pm

Social media, influencer and business agreement work is handled by Social Law Co, which is also owned by Joshua Boorman.

Call 1300 941 900Make an enquiry