Set Up A Business in Australia
This article discusses the different considerations for an organization or individuals who decide to enter the Australian market or setting up a business in Australia. Choose between establishing a new company, registering as a foreign company or acquiring an existing company. A variety of business structures are available for a new business, each with their own regulatory and tax considerations. .
The 4 most common types of business structures in Australia are:.
• sole trader – the simplest structure, gives you full control
• company – more complex, limits your liability because it’s a separate legal entity
• partnership – made up of 2 or more people who distribute income or losses
• trust – where a trustee is responsible for business operations .
There may also be a need for businesses to establish their identity through online and/or physical presence or a trade mark..
Establishing an New Australian company
Decide whether to establish a new Australian company or establish a new Australian subsidiary which also operates as an Australian company. Australian companies are incorporated businesses that are also distinct legal entities. Companies in Australia must be registered with the Australian Securities and Investments Commission (ASIC)..
Registering as a foreign company.
Foreign entities may wish to carry on business in Australia as a foreign company. The Australian Securities and Investments Commission (ASIC) outlines the criteria which define foreign companies and the rights foreign companies hold in Australia. As with Australian companies, foreign companies must be registered with ASIC. ASIC is also responsible for the ongoing regulation of foreign companies..
Acquiring an Australian company.
An alternative to establishing a new or subsidiary company may be to acquire an existing Australian company. Companies in Australia are regulated by the Australian Securities and Investment Commission (ASIC). ASIC maintains a register of regulatory and guidance documents relating to the takeover of companies..
Steps in Registering a Company
Decide if a company if is right for you. You need to decide if a company suits your needs or if you should use a different business structure. A company is its own legal entity and lets you conduct business throughout Australia. You can also make use of other privileges, such as corporate tax rates or limited liability. .
Registering a company is different to registering a business name. .
You can also register different types of companies, including:
• not for profit or charitable organisations
• registrable Australian bodies, or
• special purpose companies..
Choose a company name.
There are a few things you should consider when choosing a company name. A company’s name cannot be identical to an existing name. You can only use a name that is not identical to an existing company or business name except in some cases. Decide how your company will operate. Before registering, you will need to decide how your company will be governed. Your company can be governed by:
• replaceable rules
• its own constitution, or
• a combination of both. .
Replaceable rules are in the Corporations Act and are a basic set of rules for managing your company. If a company doesn’t want to have a constitution, they can use the replaceable rules instead. Using replaceable rules means your company does not need a written constitution. This means you don’t have the expense of keeping it updated as the law changes. .
A company can also have a written constitution instead of using replaceable rules. Companies must keep a copy of their constitution with their company’s records. Special rules for sole director/member proprietary companies If a proprietary company has just one officeholder, they don’t need to follow replaceable rules or have a constitution. If another director/member is appointed, then replaceable rules automatically apply to the company. This can be changed to a constitution at a later date. .
A proprietary company must have no more than 50 non-employee shareholders and be either: • limited by shares, or • be an unlimited company that has share capital. A proprietary company must not conduct any activity that requires disclosure to investors. They may only offer shares to members of the company or employees/subsidiaries of the company. .
Understand your obligations as an officeholder.
If you’re an officeholder of a company, you must follow the requirements in the Corporations Act. This includes meeting your legal obligations , which includes:.
• ensuring company details are kept up to date
• maintaining company records and details on the register
• paying the appropriate lodgement fees and annual review fees as required..
Officeholders are ultimately responsible for a company’s adherence to the Corporations Act..
Consent from officeholders, members and occupiers.
You must get written consent from the people that will fill these roles:.
• Director (must be over 18)
• Secretary (must be over 18)
• Member (every company must have at least one member)..
At least one director and secretary of a proprietary company must ordinarily reside in Australia..
At least two directors of a public company must ordinarily reside in Australia..
Get the consent of the owner of your registered office address. If your registered office does not belong to the company (e.g. in our office), you must get a written permission to use the address. You don’t have to send copies of your written consent to ASIC, but you do need to keep these with your records. You must also set up a register to record details of the members of your company..
Registering your company.
You can choose to register a company through us as a private service provider (PSP). We usually charge a fee for our services above what ASIC would charge. Once your application have been processed you will be:.
• given the company an ACN (which you can use to apply for an ABN)
• register the company, and
• send you a certificate of registration..
A corporate key, which is a unique number for your company. You will need your corporate key to create an account online and update your details..
After your company is registered with ASIC.
After your company’s registration with ASIC and in order to operate, your company should be registered with the ATO (Australian Taxation Office) for tax requirements..
After your company is registered, make sure:
• the company’s name is on display wherever the company conducts business and is open to the public
• the company’s ACN/ABN is displayed on any documents the company publishes
• the company’s details are kept up to date .