Home – New Forums Starting your journey Run marketplace website as sole trader or company?

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    I want to run an online marketplace where users can buy and sell products & services with other users so I registered a business name with the intention of working as a sole trader and also purchased a domain/hosting package. But I am starting to lose sleep at the thought that something could go wrong – like what if a user sells a pirated product and the owner comes back and wants to sue the site? Or if a user does a bad job or even gets injured while delivering a service and then comes back and blames the site? I understand I could write some terms and conditions so the site isn’t held liable for other people’s behaviour but couldn’t a good lawyer still find a way around that…especially if I don’t get the wording right? I live in a unit which I own and want to protect it so would it be more wise to register it as a company – despite it being far more costly and complicated? If so, would ASIC refund the business registration fees I paid if I made it a company? And does it matter that I bought the domain/hosting with my personal paypal account or would it strictly need to be purchased with a company account?

    Dave Gillen – Former FS Concierge
    • Total posts: 2,566

    Hi there Uncooked,

    Hopefully some advice will come in shortly, but in the meantime welcome aboard the forums. :)

    By the way, insurance is another way to protect yourself that you haven’t mentioned.

    Good luck!


    • Total posts: 268

    I’m with Dave here in that insurance is the main thing that is going to protect you. The difference in protection between the Sole Trader and Pty Ltd structures can be significant, but basically irrelevant if you don’t have insurance.

    If you find a good insurance broker they should be able to tell you everything you need to know about coverage.

    You will need to talk to an accountant or a business advisor to get more information on the right company structure. My general opinion would be that when in doubt, lean towards Pty Ltd.

    • Total posts: 226

    If limited liability is important to you, the sole trader structure will not provide the protection that a company will.

    Whilst insurance will decrease the risk and is a great idea, as a sole trader your personal assets are at risk to the business creditors.

    With respect to ASIC, I presume you have paid for Business Name registration, you will still need this to trade under a particular business name even when using a Company (unless you trade under the Pty Ltd Company name).

    The expenses can be reimbursed by the Company once registered.

    Feel free to get in contact if you would like to discuss the structure further or if you would like to set-up a Company. My direct number if 0401 154 313, email is [email protected].


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