Sole trader, company or trust: the plain-English guide

"What structure should I set up under?" is one of the first real decisions you'll make — and one of the most jargon-buried. Here's the plain-English version of the three options most owner-operators choose between.

Sole trader

The simplest and cheapest way to start. You and the business are legally the same thing. You trade under your own name (or a registered business name), you keep things lean, and your tax is straightforward.

The catch: there's no separation between you and the business. If the business owes money or something goes wrong, your personal assets can be on the line. For low-risk, one-person operations, plenty of people start here — and some stay.

Company

A company (Pty Ltd) is a separate legal entity that you own and direct. The big draw is that separation: it can help shield your personal assets, and it tends to look more credible to bigger clients, builders and agencies.

In return, you take on more: annual fees, more record-keeping, and legal duties as a director. It's a step up in both protection and responsibility — right for some, more than others need.

Trust

A trust is a structure that holds assets or runs a business on behalf of others (the beneficiaries). It's often used — frequently alongside a company — to manage how profits are distributed and to hold assets in a more protected way.

Trusts are powerful but more complex to set up and run, so they tend to suit people with a clearer growth or asset-protection plan rather than someone just starting out.

The questions that actually decide it

You don't pick a structure off a list — you pick it based on your situation:

How much risk does your work carry?
Who do you want to work for, and what will they require?
Are you staying solo, or building something with staff, partners or finance?
What's the tax picture — the part your tax agent should confirm?

How we help

We explain these trade-offs in plain English, set up whichever structure fits where you're headed, and bring in a registered tax agent to confirm the tax side and a lawyer where the paperwork needs one. One project, one point of contact, the right experts on the parts that need them.