What’s the Best Business Structure if I Want to Hire an Apprentice?
- johnry8
- Oct 8
- 2 min read
Hiring an apprentice is not just about giving someone a go on site. It involves employment contracts, payroll, super, workers compensation and more. The wrong structure could expose you to unnecessary risk and can be more difficult to change later down the track.
When you hire staff there comes many risks. Risk of the staff member getting hurt, risk that the staff member could cause mistakes, risks that staff member could become disgruntled for legitimate and non-legitimate reasons that could result in legal or fairwork matters. This could be a financial burden that if collapse the business could also financial put the assets linked to you if you are a sole trader at risk.
Many tradies assume being a sole trader is always best, but that is not always the case once you start building a team.
The Main Business Structures Explained
Let’s break down your main options and how they affect hiring an apprentice.
Sole Trader This is the simplest structure. You operate the business in your personal name and report income on your individual tax return.
Easy to set up
Fewer reporting obligations
You can still hire an apprentice, but all legal and financial responsibility and risk sits with you personally and your personal assets
Partnership Two or more people share responsibility for the business.
Costs and risks are shared
Less common in trades unless working with a long-term business partner
You can hire apprentices, but bule sole traders the partners are jointly personally liable for obligations & risks
Company A separate legal entity that can enter contracts and hire employees.
More suitable if you want to grow your business
Offers limited liability protection, more potential separation of your personal assets to help reduce risk
Higher setup and admin costs but looks more professional to clients and government bodies, can make it easier to attract good staff
Trust More complex and often used for tax planning or asset protection
Requires a trustee and formal trust deed
Can employ people but setup and compliance costs are higher
Not usually the first choice for new tradies or sole operators
What We Recommend if You’re Hiring an Apprentice
If you're currently a sole trader but looking to expand by bringing on an apprentice, it might be time to consider setting up a company. Here’s why.
You separate personal and business finances
You reduce your personal liability and risk
Easier to tender for government jobs
It opens doors to larger contracts that require formal business setups
This doesn't mean being a sole trader is the wrong choice, but if you're serious about growing and protecting your personal assets. If you want to set things up properly from the start, a company structure might serve you better in the long run.
Things to Consider Before Making the Switch
Talk to your accountant or business advisor
Understand the ongoing reporting and tax responsibilities
Make sure you register for PAYG withholding and super obligations
Set up workers compensation insurance for your apprentice
Need Help Choosing the Right Structure?