Company Share Trading Accounts Explained

This guide explains what a company share trading account is, how it differs from investing in your own name, the pros and cons, what you need to open one, and how the process works with Selfwealth. It's general information only — the "which structure suits me" question is one for a registered tax agent or licensed adviser, and we'll flag that clearly along the way.

What is a company share trading account?

A company share trading account is a brokerage account held in the name of a company — usually a proprietary limited (Pty Ltd) company — rather than in your personal name.

A company is a separate legal entity. That means the company legally owns the shares, not you as an individual, even if you're the sole director and shareholder. The directors act on the company's behalf: they open the account, place trades and make decisions, but the assets and any profits belong to the company.

Because the shares are owned by the company, income and capital gains are reported in the company's own tax return, and the company pays tax at the company tax rate rather than your personal marginal rate.

How a company account differs from an individual account

The mechanics of trading are much the same — you research shares or ETFs, place a buy or sell order, and hold your investments. What changes is who owns everything and how it's taxed:

• Legal owner: the company, not you personally.

• Who transacts: authorised directors, acting for the company.

• Tax: profits are taxed at the company tax rate and reported in the company's tax return, separate from your personal return.

• Ownership record: on the ASX, a company account is CHESS-sponsored and HIN-based, so the shares are registered directly in the company's name — there's no custodian holding them on the company's behalf.

If you're new to how buying shares works in the first place, our guide on how to buy shares in Australia covers the basics before you layer a company structure on top.

Who typically uses one?

Company trading accounts are common among business owners who want to invest retained profits rather than draw everything out as personal income, and among people who set up a dedicated investment (or "holding") company to hold a share portfolio for the longer term. Whether that's appropriate for you depends on your circumstances — it's worth a conversation with your accountant before you commit.

Pros and cons of investing through a company

Every structure involves trade-offs. Here are the main ones people weigh up. This is general information, not a recommendation to use any particular structure.

Potential benefits

• A flat company tax rate. According to the ATO, companies pay a flat rate of either 25% (for eligible "base rate entities") or 30%. For someone on a high personal marginal tax rate, a flat company rate can be lower than what they'd pay individually. Note that many investment-focused companies earn mostly passive income and therefore pay 30% — confirm your rate with a registered tax agent.

• Franking credits. When a company receives fully franced dividends from Australian shares, tax has generally already been paid at the company level, which can reduce the additional tax payable. Franking is a technical area — treat this as general context only.

• Retain and reinvest. Profits can stay inside the company and be reinvested, rather than being distributed and taxed personally straight away.

• Limited liability and asset protection. Shareholders' liability is generally limited to their investment in the company, which can help separate business and investment risk from personal assets. (Personal guarantees and director duties are exceptions — get legal advice.)

• Flexibility to add shareholders. Bringing in additional shareholders can be more straightforward than restructuring other arrangements.

Potential drawbacks

• No 50% CGT discount. This is the big one. Individuals and trusts can access the 50% capital gains tax discount on assets held longer than 12 months; companies cannot. A company pays tax on the full capital gain.

• Setup and ongoing costs. You'll pay ASIC fees to register and maintain the company, plus accounting fees to prepare company financials and tax returns each year.

• Admin and compliance. A company brings director duties, record-keeping and reporting obligations that an individual account doesn't.

• Losses can be "trapped." Capital or income losses generally stay inside the company and can only be offset against the company's own future income — you can't use them against your personal income.

• Getting money out. Moving profits from the company to you personally usually means paying a dividend, which has its own tax consequences.

Company vs individual vs trust vs SMSF

Different structures suit different goals. The table below is a general comparison only — the right structure depends on your objectives, tax position and circumstances, so confirm any decision with a registered tax agent or licensed financial adviser.

Selfwealth supports a range of account types — including company, trust and SMSF. If super is your focus, our SMSF trading account page explains that option in more detail. For the tax side of any of these, ASIC's Moneysmart and the ATO are good starting points, alongside your accountant.

What you need to open a company share trading account

Because a company is a registered legal entity, you'll need more information to hand than you would for a personal account. Typically that includes:

• The company's ACN (Australian Company Number) and ABN, if it has one

• Company details — registered name, address and, where relevant, the company constitution

• A Director ID for each director (a requirement in Australia for company directors)

• Identification for the directors and beneficial owners/shareholders

• A company bank account to fund trades and receive proceeds

• The company's TFN for tax reporting

Having these ready before you start makes the application far smoother.

How to open a company share trading account with Selfwealth

Opening a company account with Selfwealth follows a simple online flow:

1. Create your profile. Sign up and complete a quick ID verification as the person setting up the account.

2. Select "company" as the account type. Selfwealth offers individual, joint, minor, company, trust and SMSF accounts.

3. Add the company and director details. Enter the ACN and the director/shareholder information outlined above.

4. Fund the account. Transfer funds from the company's bank account — near-instant via Osko, or within one to two business days via bank transfer. You'll get a dedicated ANZ cash trading account with no account-keeping fees.

5. Start investing. Buy and sell ASX and Cboe shares and ETFs, plus US and Hong Kong markets, from the free app or desktop platform.

With Selfwealth, company trades cost a flat $9.50 brokerage per trade (AU and US), with no account-keeping fees — the same predictable fee whatever the trade size. And because ASX holdings are CHESS-sponsored and HIN-based, your company holds its shares directly in its own name.

Ready to get started? You can open a free Selfwealth account online in a few minutes.

Costs to factor in

There are two separate cost buckets to keep in mind:

• Trading costs: Selfwealth charges a flat $9.50 per trade on AU and US markets, with no account-keeping fees. For a company investing larger parcels of retained profit, a flat fee can work out far cheaper than percentage-based or tiered brokerage. (Past fee savings are not a guarantee of future value, and other market fees may apply.)

• Structure costs: running a company means ongoing ASIC fees and accounting fees for company financials and tax returns. These sit outside your brokerage and are worth pricing in with your accountant before deciding whether a company structure stacks up.

FAQ

Can a company open a share trading account in Australia? Yes. A company can hold a trading account in its own name. You'll generally need the company's ACN, director and shareholder details, a Director ID for each director, and a company bank account to fund trades.

Is it better to invest through a company or in my own name? It depends on your goals and tax position, so there's no single right answer. A company offers a flat tax rate and potential asset protection but misses out on the 50% CGT discount and adds cost and admin. Investing personally is simpler but taxed at your marginal rate. A registered tax agent can help you weigh it up.

Do companies pay capital gains tax on shares? Yes. A company pays tax on capital gains at the company tax rate, and — unlike individuals and trusts — it cannot claim the 50% CGT discount on assets held longer than 12 months.

Can a company account receive franking credits? Yes. When a company receives franked dividends from Australian shares, franking credits reflect tax already paid at the company level. How this affects the company's overall tax position is technical, so check the detail with your accountant.

What do I need to open a company trading account with Selfwealth? The company's ACN (and ABN if applicable), company details, a Director ID for each director, identification for directors and shareholders, and a company bank account to fund trades.

Can I move shares from my personal name into a company? Transferring shares from yourself to a company is generally treated as a disposal, which can trigger a capital gains tax event. Get advice from a registered tax agent before making any transfer.