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Canberra may be the political heart of Australia, but family businesses are the hidden steel supporting our economy.
Canberra stands apart from other Australian capitals, boasting a business landscape that is uniquely its own.
As the nation’s political epicentre, the city is home to a robust public sector and a workforce celebrated for its high level of education and skill.
Residents expect excellent wages and a superior standard of living, shaping a market where only adaptable businesses flourish.
Among those thriving in this environment are family-owned enterprises, which comprise a significant portion of Canberra’s businesses. Many of these are small, with either no employees or fewer than twenty, while others enjoy business success spanning multiple generations.
The structure of your family business must be adapted to Canberra’s distinctive business environment.
In this latest report, we've tapped into the collective wisdom of our seasoned business advisers. Inside, you’ll find the building blocks for family business success.
What is the best business structure for a family business in Canberra?
Canberra offers a unique environment where business ambition and family life can coexist harmoniously.
With the right structures in place, your family business can achieve the prosperity, pride and generational continuity it deserves.
We have broken down the most common structures used by family businesses in Canberra, each with its own strengths and ideal use cases.
Sole Trader
Best for individuals starting out on their own.
- Simple to set up with minimal admin.
- Profits taxed at your personal marginal rate
- No legal distinction between you and the business
- No asset protection or equity investment options
- Harder to scale or transfer
Partnership
Ideal for two or more people sharing ownership, profit, and decision-making.
- Low cost to establish
- Profits distributed to partners and taxed at individual rates
- Shared liability unless structured as a limited partnership
- Formal partnership agreement is critical
- Greater flexibility than sole trader, but harder to scale than a company
Company
A separate legal entity offering scalability and stronger governance.
- Access to equity investment and fixed corporate tax rates
- Better suited for growth and succession planning
- Offers limited liability (with caveats)
- More complex and costly to set up and maintain
- Subject to obligations under the Corporations Act 2001
Discretionary Trust
Favoured for wealth protection and income distribution flexibility.
- Allows income splitting to reduce tax
- Strong asset protection
- Not ideal for holding onto profits or attracting external investment
- Must distribute profits annually
- Legal lifespan typically capped at 80 years
Trust
Structured with fixed entitlements, making it well-suited to joint ventures.
- Offers defined ownership stakes
- Can be easier to manage with unrelated parties
- Useful for investment holding or property syndicates
- Less flexibility than discretionary trusts
- Requires careful agreement drafting
Self-Managed Super Fund (SMSF)
Designed for retirement planning with added investment control.
- Allows ownership of business premises via the fund
- Offers concessional tax rates
- Complex compliance and legal obligations
- Can't be used for direct business trading
- Long-term structure with strict regulation
When it comes to structuring a family business, the risks of getting it wrong are real.
Managing a family business presents unique challenges where personal and professional boundaries often blur.
From Supreme Court battles over billion-dollar trusts to once-unified families torn apart by poor governance, the wrong business structure can lead to costly disputes, dissolved wealth, and fractured relationships
Discover how family businesses in Canberra can overcome these hurdles and structure your business for success.
Thiru Kandiah
“Family businesses resonate with the community. They’re involved in the local community, they’re invested and there’s incentive to do right by it.
The people who own family businesses are also relatable, we want to cheer them on when they succeed, hit milestones and sometimes, get passed down to the next generation.”
Strategic structuring over time
Fixing a bad structure is expensive, both financially and emotionally.
But you don’t have to overhaul your entire business each time you grow. Instead, use new structures at key milestones to:
- Fund new investments
- Protect specific assets
- Deliver a standalone project
- Test a new venture or product line
The core of your structure can remain stable, while additions evolve to suit the next stage of your business.
Estate and succession planning in Canberra
Business structures play a key role in making sure your family business is protected and passes on successfully to the next family members. Learn about the key estate planning documents that can be the difference between a bitter end to your family business and a bright future for everyone involved.
These include:
- Will (which may incorporate testamentary discretionary trusts)
- Memorandum of wishes
- Enduring power of attorney
- Insurance
- Binding financial agreement
Andrew Sykes
“Many of the most successful business owners can attest to the fact that a good adviser is worth their weight in gold.
Their objectives are very simple: help you achieve your success by being a source of valuable insight and guidance, and a trusted confidant you can rely on at any stage of your business journey. ”
Do you have a plan for exiting your family business?
Not all family businesses end well. It is wise to discuss your business structures with a trusted adviser to determine how assets will be passed on and what the tax implications might be for those who inherit. Working with a business adviser from our Canberra office could help you answer important questions surrounding your family legacy and wealth management strategies.
They can also mediate discussions between family members, explain exit strategies and make sure everyone, including those who are not directly involved in the business, is considered in the planning to avoid disputes.
Astute advice and good planning save a family more than just money; it can preserve relationships and ensure a legacy for generations.
Get in touch with the Canberra team
At RSM, we have more than 50 years of experience working closely with family businesses in Canberra. We offer professional advice, business solutions and ideas tailored to your needs - built on a relationship of trust and mutual understanding.
Get in touch with the Canberra team
At RSM, we have more than 50 years of experience working closely with family businesses in Canberra. We offer professional advice, business solutions and ideas tailored to your needs - built on a relationship of trust and mutual understanding.
Get in touch with the Canberra team
At RSM, we have more than 50 years of experience working closely with family businesses in Canberra. We offer professional advice, business solutions and ideas tailored to your needs - built on a relationship of trust and mutual understanding.
Produced in partnership with Hitch Advisory
RSM Australia is proud to collaborate with Hitch Advisory on this edition of thinkBIG.
As a full-service commercial law firm, Hitch Advisory provides clear, practical legal advice to family businesses across all sectors in Australia.
For a confidential discussion with their legal team, contact Hitch Advisory.
