One of the first questions an experienced NDIS business broker asks a seller — before valuation, before going to market, before anything else — is: what structure is the business operating under?
The answer matters more than most sellers expect. Whether your NDIS business operates as a sole trader, a company or a trust shapes what a buyer can actually acquire, how the transaction is structured, what the tax consequences are for you as the seller, and what the NDIS Quality and Safeguards Commission requires around the change of ownership.
There is no universally best structure for selling an NDIS business. But understanding what your current structure means for a sale — and whether any change is worth considering, with proper advice — is essential knowledge for anyone planning an exit.
This article is general information only. It is not legal, tax, financial or credit advice. Get advice on your own circumstances before you act.
Sole Trader: The Simplest Structure With the Most Constraints
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A sole trader operates in their own name, using their personal ABN and tax file number. It is the simplest and cheapest structure to establish, and many NDIS providers begin as sole traders, particularly in the early stages of building a practice. The government's business.gov.au guide to sole trader and company tax differences summarises the basic differences.
For a sale, the sole trader structure creates a significant constraint: a buyer cannot buy the sole trader "entity". There is no company to transfer and no shares to sell. What the buyer can acquire is the goodwill, the operational assets, the business name and the benefit of contracts that can be assigned — but not the seller's ABN or legal identity. Participants are not assets that transfer; each participant chooses their provider.
This has a direct implication for NDIS registration. The NDIS Commission's guidance on buying or selling a registered NDIS business confirms that registration is linked to one ABN and cannot be transferred to another ABN. A buyer with a different ABN cannot use the sole trader's registration and, if they need registration, must hold or apply for their own.
That does not mean there is always a gap after settlement. A buyer may already be registered for the relevant registration groups, and the parties can make completion conditional on the buyer holding the approvals it needs. Not every NDIS support requires registration either — some activities require registration, while for others it depends on how the participant's supports are funded and managed. The point is to plan the registration position into the timetable rather than assume the seller's registration comes across.
For sellers, it means the value of the registration you have built — including the audit history, compliance record and registration groups — does not pass directly to the buyer. That is a genuine constraint on what the buyer is acquiring and can affect what a buyer is prepared to pay.
A sole trader thinking about a future sale should take specialist accounting, tax and legal advice early on whether any change of structure makes sense for the business generally. The ATO's small business restructure roll-over can, for eligible businesses, allow certain assets to move to a new entity without an immediate income tax or CGT consequence — but eligibility involves several conditions, including that the transaction is part of a genuine restructure and that ultimate economic ownership does not change. The ATO's Law Companion Ruling LCR 2016/3 explains that a restructure undertaken as a preliminary step to realising the business (such as a sale) is not a genuine restructure, and that its three-year "safe harbour" is conditional — there is no 12-month qualification period. Restructuring should not be approached as a way to obtain a tax exemption on sale, and no structure guarantees a tax-free outcome. Your tax adviser should model the options.
Company Structure: Flexible in a Sale
Many established NDIS businesses operate through a proprietary limited company (Pty Ltd). A company offers more flexibility in a sale.
A company is a separate legal entity with its own ACN and ABN. When an NDIS business operates through a company, the NDIS registration is held by the company, linked to the company's ABN. This allows two distinct deal structures.
Asset sale. The buyer purchases the operating assets of the business — goodwill, equipment, systems, assignable contracts and other specified assets — from the company. The company and its ABN stay with the seller, and so does the registration. As with a sole trader sale, the buyer must hold or obtain any registration it needs under its own ABN, and employees' transfer and entitlements are handled under the employment arrangements the parties agree and the law requires.
Share sale. The buyer purchases the shares of the company. The same legal entity continues with the same ABN, so its registration remains with it — it is not "transferred" to anyone. This continuity is one reason buyers may value a company with a clean registration and compliance record, although whether it attracts a higher price depends on the business and the buyer. A share sale is still a change of ownership: the Commission must be notified as soon as possible after whichever comes first — becoming aware the change will happen, or the change happening — and, for some certification registration groups, a significant change to the organisation or its governance can mean an audit must be started within a set period. The Commission's detailed guidance explains when this applies; confirm applicability and timing with your adviser rather than assuming an audit is always, or never, required. Our guide to the NDIS change of ownership process covers the steps.
The choice between asset and share sale has material consequences for both parties. In an asset sale, the sale proceeds are received by the company, and the owners then need to consider how to extract them — for example through dividends, a capital return or a wind-up — each with different tax consequences. In a share sale, the shareholders dispose of their shares directly and any capital gain is assessed on the shares.
The 50 per cent CGT discount may be available to eligible individuals and trusts that have held the asset for at least 12 months, subject to residency and other conditions; it is not available to companies, and holding for 12 months does not by itself make a sale eligible for every concession. Company tax rates depend on the company's circumstances in the relevant income year — including its aggregated turnover and the proportion of passive income — and can change, so no rate should be assumed. The small business CGT concessions on a sale and the small business restructure roll-over are separate regimes with different eligibility tests. Turnover, asset values, active-asset requirements and, for shares or trust interests, additional conditions may matter. Have a tax adviser test the relevant concession rather than assume a general small-business threshold applies. These interactions are not simple and must be modelled with a tax adviser before heads of agreement are signed. Our article on the tax implications of selling an NDIS business covers the concepts in more detail.
From the buyer's perspective, a share sale means acquiring a company with its entire history — including unknown historical liabilities, NDIS Commission matters, tax positions and employment claims. That is why buyers in share sales typically seek broader warranties and indemnities than in asset sales, and why due diligence scope is usually wider. See our guide to contracts, due diligence and settlement.
Trust Structure: Added Complexity in Sales
Some NDIS businesses operate through a discretionary (family) trust or a unit trust. A trust is not a company and is not a separate legal person: the trustee — an individual or a company — holds the assets and enters contracts on the trust's behalf, and an operating trust may have its own ABN; confirm the identifier associated with this business. The government's business.gov.au trust guide explains the basics.
In a unit trust, a buyer may acquire the units, which can mean the business continues through the same trustee and trust ABN. In a discretionary trust, beneficiaries do not own fixed interests, and the mechanism for a change of control is usually more complex — for example a change of trustee, a change of the person who controls the trustee company, or a sale of the business assets out of the trust.
None of these steps provides automatic registration continuity. Which ABN the registration is linked to, who the trustee is, what the trust deed permits, and whether the ABN changes all need to be reviewed. A change of trustee or of the people who control the provider is likely to be a change the Commission must be told about, and in some cases a different ABN will mean a new application. Buyers and sellers should get legal advice on the trust deed and the registration position before choosing the transaction structure.
The tax treatment of a trust sale also depends on how the transaction is structured — a transfer of units, a sale of business assets by the trustee, or a change of trustee — so identifying the structure early is essential.
Sellers operating through trusts face particular complexity in showing buyers exactly what they are acquiring: which assets are held by the trustee for the trust, whether contracts are in the trustee's name, and what happens to the NDIS registration and any other approvals. Buyers should conduct due diligence focused specifically on the trust deed, the trustee, and what the trust actually holds.
What This Means for Sellers Planning a Sale
Your structure is not a background detail — it is a deal mechanic. Understanding it early, and taking advice on how it affects the transaction you are planning, can have a material effect on both the price achievable and the after-tax proceeds you keep.
Sellers operating as sole traders should take accounting, tax and legal advice well before going to market on how a sale would work under their current structure and whether any change is appropriate on its own merits — not as a device to obtain a tax outcome on sale. Early planning gives time for advice and for records to be in order before buyer due diligence begins. See preparing your NDIS business for sale.
Sellers operating through a company should get advice on whether an asset or share sale suits their circumstances, and should make sure the company's compliance record, registration details and financial history are presented accurately whichever structure is used.
Working with an NDIS business broker who understands how entity structure shapes deal mechanics, together with early advice from your tax adviser and lawyer, is the most reliable way to plan an exit that works for you.
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Considering selling your NDIS business and not sure how your structure affects the process? NDIS Business Sales works exclusively in the NDIS sector. We help sellers understand how their structure shapes the transaction and work alongside their advisers. Request a confidential NDIS business valuation appraisal, learn about selling with us, or contact NDIS Business Sales for an obligation-free conversation.
