There are three main options for running a business in Australia:
This is the simplest and least expensive type of business where you register an ABN with the ATO.
A sole trader is not a legal entity and as an individual, is responsible for all the actions of the business. You will be liable for any debts incurred.
A partnership involves an agreement between two or more parties to have a legally-binding business relationship.
In a partnership, all partners own the business and its assets jointly and are equally responsible for debts. So even if you only own 10% of the partnership, you’re personally responsible for 100% of its debts (as are the other partners).The Partnership Act together with your partnership agreement governs your rights.
99.9% of companies used by small businesses are proprietary limited companies. The sort that eCompanies registers. A company is a separate legal entity which reduces your personal liability for the debts of the company. It also gives you much greater flexibility.
A company is also more expensive to start and requires greater overhead to operate.
A business name is simply a name or title under which a person, or other legal entity, trades.
When setting up your business, if you choose to operate as a sole trader, partnership or a trust, and not as a company, then you will have to register your business name with ASIC. If your business name is yours, or your partner’s, first name and surname, then there is no need to register.