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.
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
- Joint venture
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).
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.