Company incorporation in Australia- Step by Step guide
This article read covers what you need to know in order to get your new business registered in Australia. It has the major details on Australia’s requirements, procedures, and the estimated timeline to register a company.
Minimum Setup Requirements to
Register a Company in Australia
For
a proprietary company:
·
Director (must
reside in Australia) – 1
·
Shareholders
(crowd-sourced funded, majority must reside in Australia) – 2
For
a public company:
·
Director
(majority must reside in Australia) – 3
·
Company
Secretary (must reside in Australia) – 1
A
company director is able to appoint someone else to act as an ‘alternate
director’ for a fixed period of time. The ‘alternate director’ may have the
full rights or selected rights of a director, he/she can also act as the
‘alternate director’ for more than one director.
Registration Process
The Australian
Securities and Investment Commission (ASIC) oversees the business
incorporation process in compliance with the Australian Government. The
Business Registration Service has streamlined and simplified the
incorporation process so it’s a breeze to do online Setting up a business
structure | ASIC – Australian Securities and Investments Commission.
Every registered company in Australia must have
an Australian Business
Number (ABN) – a unique 11 digit number
that is the official and legal identification for your business to the public.
The Business Registration Services is a one-stop
platform for anybody keen on starting their own business in Australia. The
following are the required documents that must be applied and approved in order
for the company to be registered.
- Australian Business Number (ABN)
- Business Name
- Tax Registration
- Licences and Permits
- Company governance structure
Step 1: Decide on your business structure
The first step after deciding to start your own business is to
decide and declare the type of business structure that is the best fit for your
business. The most common types of business structures are:
- Sole Trader
- Partnership
- Joint venture
- Trust
- Company
Step 2: Establish
internal governance structure
Having a good and strong internal governance structure helps to
minimise the risks and streamline the process for making business decisions.
However, proprietary companies consisting of only one director and shareholder need
not establish an internal governance structure.
The internal governance structure must encompass the following
processes:
- Procedures for director and
member meetings
- Share structure &
transfers
- Director appointment and
removal
The business can be governed by either replaceable rules or its
own constitution. It can also be a mixture of both.
Replaceable rules are a basic set of rules that can be found in
the Corporations Act and is an easier method to govern your business.
Step 3: Appointment
of key officeholders
Officeholders must be made aware of their legal responsibilities
and duties when being appointed officially into their roles. Therefore, it is
important to obtain written consent from the parties that have been appointed
to office positions. Although the consent is not officially required as a
document by ASIC, it is important to have it in the company’s records.
Step 4: Registering
your business with the ASIC
Registering the company will entail submission of a completed ASIC Form 201
Application and the payment of a
registration fee (dependent on the type of business structure).
Once the application has been approved, ASIC will issue the ABN
and a certificate of registration which must be displayed at all times at the
place of business.
The most important identity for a company in Australia is the Australian Business Number (ABN). Having an ABN makes your business identifiable on
its own and is used for official and legal purposes as well. Application for an
ABN is free for everyone, but not all are entitled to an ABN.
A company requires an ABN if:
- The company is conducting/
starting a business in Australia
- Producing supplies connected
with Australia’s indirect tax zone
- A Corporations Act company
Reserving a business name
The business name for the company must follow a fixed set of
requirements in order for it to qualify as a company name. You can check if the business name intended has been registered already by
searching it on the Australian
Securities & Investments Commission (ASIC) website.
The cost of registering a business name is AUD$36 (for 1 year) or AUD$85 (for 3 years).
*Note: it is optional to reserve and select a business name.
Businesses in Australia are officially identified by their Australian Business
Number (ABN).
Step 5: Tax registration and
compliance
Businesses must also make sure they are fully compliant with the
Australian taxation payment system. Therefore, the business must have the
required tax registrations like a Tax File Number and the required exemption
documents (if needed).
Annual
filing
All businesses operating in Australia must submit financial
reports with ASIC and this is done usually towards the end of the financial
year. Annual financial reports must be submitted for auditing as well.