Are you looking to start your own mechanic business, or expand your already existing mechanic business? If so, it is essential that you choose the best business structure for you. There is a vast array of business structures that you can choose for your business, with each one having separate pros and cons. Consequently, many business owners face a monumental task in deciding which one will work best for them and their business. There is no right or wrong choice when it comes to business structures, as its success will depend heavily on your personal circumstances. Therefore, it is important that you are aware of each business structure in order to know which one will work best for you.

Should I choose to be a Sole Trader?

A sole trader is essentially a person conducting a business by themselves in their own name. This is by far and away the most simple business structure you can choose, and traditionally it has been the default business structure for a mechanic business. To become a sole trader you need only register a business name, or if you are using your own name, you need not register anything at all. However, as a mechanic, it is likely that you will have to obtain a business licence, by contacting the Australian Business Licence Information Service.

The main benefit of being a sole trader is that you will have complete ownership and control of your business, as legally, there is no separation between you the person, and you the sole trader. This will allow you to run your mechanic business in exactly the way that you want to, knowing that you have total responsibility.

However, complete ownership also has its downsides, as you the person will be liable for all dealings entered into as you the sole trader. As a result, it is essential that you take great care in assessing your financial situation in order to determine how becoming a sole trader will affect your life in general. Becoming a sole trader is an immersing experience, every decision you make can have consequences upon both your life and your business. For many mechanics, the ease of creation of a sole trader business, and all that it entails, is exactly what they want. For others, they would prefer more of a separation between their business and life outside the business.

Should I choose to be a Company Business Structure?

At the other end of the spectrum, you could choose to conduct your mechanic business as a company. A company becomes a separate legal entity to the business owner entirely, thereby separating the business from the business owner. However, this protection comes at a cost in terms of a significant amount of conditions that will be imposed on how your business will operate.

The main benefit of choosing a company as the business structure for your mechanic business is that you will be completely protected financially from any dealings you enter into on behalf of your business. This will allow you to run and potentially expand your business, without having to worry about the personal consequences of a failed venture or transaction.

Conversely, however, creating a company is a costly process. You will have to submit numerous documents, have your finances evaluated and create structures within your business that you may or may not feel that you require. While there are some tax benefits for corporations, your tax returns will also be more heavily scrutinised by the Australian Taxation Office. For many people, a company provides them with the freedom they need to run their business to the best of their ability, for others it is seen as an unnecessary and costly hassle.


If you are looking to start your own mechanic business, or expand your already existing mechanic business, it is essential that you choose the best business structure for you. A sole trader and a company are but two options available to you, and there are numerous other options from which to choose from, all of which have their pros and cons. Without prior legal experience, it is very difficult to be certain that you have chosen the best one for you. As a result, it is advisable that you seek legal advice before making such an important decision for your business. A list of business structures that you can choose for your business can be found here. Additionally, if you have any further questions relating to what business structure is best for your business, feel free to call LegalVision for a fixed-fee quote on 1300 544 755.

Adi Snir
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