Sole traders, partnerships, companies and non-profit organisations are the four main types of business. The rates for income tax vary depending on which type of business you are operating. Learn about these four types of business and the tax rates that apply for each.
In a partnership, two or more people run a business together. Companies with five or fewer shareholders can elect to be a LTC. Shareholders of a look-through company (LTC) are liable for tax upon the company's profit, as well as being able to offset the company's losses against their other income.
A company is a formal and legal entity in its own right, separate from its shareholders with its own unique tax obligations.
In general the initial amount of money you put into a trust is not taxed. Find out more here about taxing trusts and trustees.
A sole trader is a person trading on their own.
A non-profit organisation is any society, association or organisation that is not carried on for the profit or gain of any member, and has rules that do not allow money, property or any other benefits to be distributed to any of its members.
Date published: 14 Oct 2004