What’s a ‘person’? Legal entities in hospitality businesses

  • Sole traders, corporations, partnerships and trusts - know the difference.

You may have heard the idea that a person includes companies. That sounds a little odd. Lawyers, on the other hand, don’t blink at that sentence.

Section 2C of the Acts Interpretation Act 1901 (Cth) says that a reference to a “person” (amongst others) in a piece of Federal legislation includes a reference to individuals, bodies politic and corporations.

Why does this matter? It’s all about referring to correct thing. Precision. In this case, we’re talking about kinds of legal entities.

A legal entity is a reference to the thing that can sue and be sued, and can own property in their own right.

The four most common legal entities in business are:

Another is an incorporated association, which is common for sports clubs and for charitable organisations. Profits can’t be distributed to members – they must used in a way consistent with the objectives of the incorporated association, which are defined the the association’s constitution or rules.

Your business structure

Choosing the legal entity to operate your hospitality business is best informed by:

  • your business goals and visions;
  • your personal financial circumstances;
  • advice from your accountant; and
  • legal advice from us.

Things that aren’t legal entities

Want more information?

Read how we can help you choose a legal entity or contact us for advice tailored to you.



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