Aussies started 44,000 companies in one month, and the tax rules may be why

Nearly 2.82 million Australian businesses are now trading, the strongest annual growth in four years, new ABS figures reveal, with companies leading the charge.

Australians kept starting businesses at pace in July 2026, and increasingly, they’re choosing to do it as companies rather than sole traders or trusts.

New data from Lawpath shows 44,040 new companies were registered in July, up 22.87% on the same month last year. That builds on 12.55% annual growth recorded in June, suggesting the momentum isn’t a one-off. Sole trader registrations also held up, with 87,548 new ABN registrations for sole traders, up 1.12% year-on-year. In total, 127,513 new ABNs were registered during the month.

GST registrations jumped too, up sharply from 26,487 in June to 46,002 in July.

The timing lines up with changes announced in the Federal Budget affecting discretionary trusts and capital gains. Lawpath is careful not to overstate the connection.

“While the Index cannot establish a direct link, the sharp rise in company registrations alongside the decline in trust registrations may be an early indication that the changing tax environment is beginning to influence decisions around business structure,” the report notes.

Lawpath Co-Founder and CMO Tom Willis says the broader pattern is one worth watching, regardless of the exact cause.

“The encouraging part of the July data is that Australians are continuing to take the step into business ownership,” Willis said. “More than 44,000 new companies were registered in a single month, and sole trader registrations also remained ahead of last year. We’re also starting to see a very different pattern across business structures. With the Budget changes now part of the conversation, the rise in company formations alongside lower trust registrations is something we’ll be watching closely over the coming months.”

A record year, confirmed by official figures

The Lawpath figures landed the same day the Australian Bureau of Statistics released its own annual count of Australian businesses for FY26. The ABS figures put the total number of actively trading businesses at a record 2,814,778 as of 30 June 2026, a net increase of 85,130 businesses over the year, or 3.1%. That’s the largest annual gain in the four years the release covers, and well ahead of the 66,650 businesses added in FY25.

Companies accounted for most of that growth. The ABS recorded 1,271,197 companies operating by the end of FY26, up 5.2% on the year prior, with 205,319 new company entries, 7.8% more than the previous year. Sole proprietors grew 3.1% to 848,300, an improvement on the 2.4% growth recorded in FY25. Partnerships were the outlier, falling 4.2%.

“The ABS numbers give us the official picture of where the country finished FY26, and it’s a record,” Willis said. “Almost 2.82 million businesses trading, and the strongest net growth in four years. What our July data adds is what happened next. The ABS confirms companies were the engine of FY26 growth, and our first month of FY27 shows that shift accelerating rather than easing off.”

Who’s starting businesses now

The age profile of new business owners is shifting too. Australians aged 45 to 54 made up 23% of first-time directors in July, up from 16% in the same month last year, making them the largest age group among new directors. At the same time, younger Australians increased their share as well, with 18 to 24 year olds accounting for 8% of first-time directors, up from 6% a year earlier.

“It’s encouraging to see business creation stretching across generations,” Willis said. “We’re seeing more younger Australians entering business, while people with significant career experience are also making the move. That diversity is a healthy sign for the broader small business ecosystem.”

Regional Australia holds its share

Geographically, the split between regional and metropolitan business formation stayed largely consistent. Regional Australia accounted for 31.99% of new registrations in July, close to one in three new businesses nationally, with the remaining 68.01% coming from metropolitan areas.

Among the states, Queensland was the only major state to record year-on-year growth in new ABN registrations for the month, rising slightly from 26,914 to 27,102. New South Wales remained the largest market overall with 40,224 registrations, followed by Victoria with 33,668 and Queensland with 27,102.

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