I’m a Medical Consultant - How do I know if I need a Company or Sole Trader Set Up?
- johnry8
- 3 days ago
- 2 min read
1. Tax Planning and Flexibility
Sole Trader
Income is taxed at individual tax rates.
If your consulting income is high, you may find yourself in the upper tax brackets.
Simpler tax filings, but fewer planning tools.
Company
Income is taxed at the company tax rate (currently lower than the top individual brackets).
You can pay yourself through wages or dividends.
Offers more options for structured cash flow planning.
2. Personal Liability
Sole Trader
You and the business are legally the same.
Personal assets may be exposed if there is legal action or debt.
Insurance is essential to reduce risk.
Company
A company is a separate legal entity.
Your personal assets are generally better protected (separate from any medical indemnity matters, which have their own rules).
Directors still have certain responsibilities, but overall protection is stronger than a sole trader setup.
3. Professional Requirements for Medical Practitioners
Some medical consultants must check alignment with ATO guidelines on personal services income (PSI).
PSI can limit some tax planning strategies, especially around income splitting.
The structure needs to be chosen carefully so it complies with ATO rules for medical consultants.
4. Costs and Administration
Sole Trader
Very low cost to set up.
Minimal ASIC obligations.
Basic bookkeeping and tax compliance.
Company
More expensive to start and run.
Annual ASIC fees and company tax returns.
Requires proper payroll setup if you pay yourself wages.
Bookkeeping standards need to be higher.
5. Professional Image and Growth
Sole Trader
Simple and suitable if you’re consulting on your own with no plans to expand.
Branding can still be strong, but the structure is basic.
Company
Seen as more formal and established.
Easier to bring on contractors, employees or partners later.
Helps when working with hospitals, clinics or agencies that prefer contracting with companies.
6. Superannuation and Insurance
Both structures allow you to contribute to super, but operation differs:
Sole traders can claim personal contributions.
Companies can pay super as employer contributions, which can be smoother for planning.
Insurance (professional indemnity, public liability, income protection) applies to both, but the type and level may differ depending on how your contracts are structured.
So Which Structure Suits a Medical Consultant Best?
Sole trader works well if you want low costs, low admin and you’re starting with smaller engagements.
Company suits those with higher income, broader risk exposure, plans to expand or a desire for stronger asset protection and more controlled tax planning.
Not sure which structure fits you best? The team at Rise Accountants can help you determine whether a sole trader or company structure is going to suit your needs.