Reading time: 2 minutes

Every day, hundreds of new companies are incorporated in Australia. If you intend to set up a company as a founder or director, or plan to invest in a company, you should consider how you are going to own the shares in the company and whether you will do so in your individual capacity; through a company; or through a trust. If you are considering owning company shares in your individual capacity, make sure you understand the advantages and disadvantages as set out in this article.


Owning shares in your individual capacity can have some advantages. These advantages include the following:

  • Cost and complexity: Owning company shares in your individual capacity is much cheaper (and less complex) as you do not need to set up a company or a trust.
  • Capital gains tax discount: If you own shares in a company for over 12 months in your individual capacity, you will be eligible for the 50% capital gains tax discount when you dispose of those shares.


Despite the advantages of owning company shares in your individual capacity, there are also disadvantages. These include the following:

  • No tax benefits: If you own the shares in your individual capacity, you would not have the tax advantages you would receive if the shares were held in a trust. See separately our article entitled ‘Share ownership: should I own company shares through a trust?’ for more information on the tax benefits of owning shares through a trust.
  • No limited liability: In the unlikely event that the corporate veil of the company were to be pierced, you would be exposed to liability and an individual does not have limited liability as a company.
  • Succession: If you die, your shares will vest in your estate.


Although owning shares in your individual capacity is cheap, easy and entitles you to the capital gains tax discount, it does not have the tax or limited liability benefits of a trustee or company shareholder. You should, therefore, consider owning your shares through a company or trust. If you are considering establishing a company or investing in an existing company, talk to a business structuring expert.


How Franchisors Can Avoid Misleading and Deceptive Conduct

Wednesday 18 May | 11:00 - 11:45am

Ensure your franchise is not accused of misleading and deceptive conduct. Register for our free webinar today.
Register Now

New Kid on the Blockchain: Understanding the Proposed Laws for Crypto, NFT and Blockchain Projects

Wednesday 25 May | 10:00 - 10:45am

If you operate in the crypto space, ensure you understand the Federal Government’s proposed licensing and regulation changes. Register today for our free webinar.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

Day in Court: What Happens When Your Business Goes to Court

Thursday 2 June | 11:00 - 11:45am

If your business is going to court, then you need to understand the process. Our free webinar will explain.
Register Now

How to Manage a Construction Dispute

Thursday 9 June | 11:00 - 11:45am

Protect your construction firm from disputes. To understand how, join our free webinar.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer