Leni Mayo

aussie startups and stuff

A Basic Shareholder and Company Structure for Aussie Startups

I’m occasionally asked by first-time startup founders how to structure their company and share ownership.

Here is a basic setup that I’ve personal experience with. It works well. It aims to balance:

  • tax

  • asset protection

  • cost of setup and ongoing administration

The company

Companies are easily purchased online, either off-the-shelf or freshly minted.

Some people create two companies, one to hold assets and a second trading entity. Maybe that helps with asset protection but I don’t think the extra complexity is worth it. Act ethically and don’t get sued.

Shareholders == Family Trust

Instead of holding shares personally, hold them in the name of a Family Trust.

Holding shares via a Family Trust has two benefits: tax and asset protection.


When your Family Trust sells the shares in your startup, the capital gain is distributed to some/all of the Trust’s beneficiaries.

In spreading the gain amongst a number of beneficiaries (people or companies), less tax may be paid overall vs if one person (you) gets the entire gain because:

  • beneficiaries who aren’t on the top marginal rate pay less tax than you (on the marginal rate)

  • the gain may be distributed to a corporate beneficiary, for whom the tax rate is (currently) 30%.

Don’t have family right now? How about 5-10 years down the road when your shares are worth something?

Family trusts retain access to the 50% capital gains discount that applies to assets held for longer than 12 months.

Asset protection

Since you don’t own shares in your startup, the Family Trust gives you a degree of asset protection.

The Trustee

Family Trusts are administered by a Trustee. The Trustee can be you, a friend or a company.

The simplest option is for you to be the Trustee.

Corporate Trustee

Some people create a company to act as “corporate trustee” of the Family Trust. They feel that a corporate trustee offers better asset protection.

Trustees are personally liable for debts incurred on behalf of a Trust. While trustees can be personally indemnified out of the assets of the Trust, if your Trust is going to trade or go into debt, then maybe you do need a corporate trustee.

But if the sole purpose of your Trust is to hold shares in your startup, you wont be exposed to that sort of risk.

Remember, the most likely scenario is that your startup fails and it’s shares are worth nothing. If down the road, your shares turn out to be worth gazillions and your accountant or laywer convinces you to switch to a corporate trustee, you can do so without triggering a capital gain.

Summary of Basic Aussie setup


are a beneficiary of

Your family trust

which owns shares in

Your Australian company

Setting up in the USA

Some people choose to live in Australia but set up their company in the USA. In that scenario, it’s still nice to have an Australian company for employment and banking etc. Here’s a setup that I’ve seen work well:


are a beneficiary of

Your family trust

which holds shares in

Your Delaware C corp

which owns 100% of

Your Australian company


Your Startup Pty Ltd

  • $600 to buy a new company (either off-the-shelf or freshly minted) plus

  • $230 annual ASIC fees plus

  • bookkeeping and accounting fees - this will be your biggest expense

Family Trust

  • $400-500 setup plus

  • annual accounting fees - minimal because there’s so little going on.

Delaware C Corp

  • generally done via a US lawyer, setup fees are in the “low thousands”


I’m a programmer, not a laywer or an accountant. What I’ve shared here is my understanding - your mileage may vary.


Australian Trust Law

Capital Gains Tax at the ATO and Wikipedia