11 Aug Registering a Company in Australia – Steps and FAQs
A company is a type of business structure used which has several legal and tax benefits over a sole trader or partnership.
When a company is registered, it creates a legal entity that’s separate from you. That is, if you move from a sole trader to a company, you and the business are no longer one and the same person.
This legal entity allows you to operate independently of yourself and your name.
There are lots of benefits to having a company as opposed to sole trader or partnership, which in our view from a legal perspective, greatly outweigh any compliance and added obligations and other costs.
Business is inherently risky, that’s why they call it “risky business”. If there is any real element of risk, then business owners should heavily consider incorporating to a company sooner rather than later.
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How do I register a Company in Australia?
In Australia, a Company must be registered with the Australian Securities and Investment Commission (ASIC). Your accountant or third party providers can assist you with registering a Company.
ASIC is the main regulatory body for Company registration in Australia, who will ultimately be responsible for registering and regulating your Company. Their website sets out the requirements for registering and maintaining a Company and offers lots of background information.
Registering a Company involves key steps:
1. Choose your Company name
You can search existing Company names on the ASIC website.
If your goal is to use your Company name to identify your brand, contact us for a thorough search and specific advice in relation to Trade Marks and Business Names to make sure your brand is available.
2. Choose the Structure of your Company
Is the company going to be private, publicly listed, or not-for profit?
You also need to decide the class of shares each member will have, who will own them beneficially; how much and when they will pay, whether it will be limited by shares, unlimited etc.
The different type of business will influence the shares each member has, which forms you must use to register the Company, it’s official name (IE the difference between Limited (LTD)? -vs- Proprietary Limited (PTY LTD)? Etc.).
3. Choose who will be responsible for the Company
Directors control the Company.
Shareholders own the Company.
Secretaries govern and monitor the Company’s compliance with official legal structural and financial requirements.
You must gain written consent from all Directors and any Secretaries to officially connect them to the Company. You do not need this to register the Company, though must maintain a record after incorporating the Company.
All companies, except proprietary companies, must follow Australia’s key laws surrounding Companies, under the Corporations Act 2001 (Cth).
4. Establish a Share Structure
If there are multiple Shareholders, you must create a formal Shareholders’ Agreement which defines the Shareholders’ responsibilities and relationship.
Setting up a structure should minimise risks and formalise decision-making within the Company such as share transfers, member meeting procedures and Director appointment or removal, whether to draft a constitution or use the Replaceable Rules in the Corporations Act are compulsory and will give you peace of mind that systems and structures exist to help organising how the Company runs.
5. Choose the location of your Company
What will be the Registered Address?
The Registered Office Address will be the official location connected with your Company, including for service of legal documents.
This can be the address of an official connected with your Company, such as your Accountant’s Office. You will need formal consent from such a person if using an address other than your own.
Designate a Principal Place of Business
This is where the majority of business will be carried out and can be the same as your Registered Office Address.
How to maintain proper registration of your Company?
You are responsible for notifying ASIC when any details of your Company change, e.g., address, Directors or Shareholders’ names. You can do this online or by completing the appropriate form found on the ASIC website.
An annual review of your Company needs to be conducted and the current annual review fee is $276 registration fee needs to be paid to ASIC
How is a Company different to another type of business?
Companies and other types of businesses are different creatures, and it’s important to ensure which one may suit your needs, depending on the responsibilities and controls you’re happy to have and what you intend to do with your goods / services.
Companies are legal entities and so impose a great deal more legal requirements, fees (e.g. for regulatory registrations), record-keeping of official meetings, tax returns and compliance with the Corporations Act 2001 (Cth), are subject to annual review by ASIC are responsible for their own debts and must maintain a separate business bank account. A key difference in creation and ending of either is that a Company needs formal registration and deregistration, as opposed to a sole trader’s business name which merely requires cancelling an ABN within 28 days of trading. Your accountant will be able to assist you with all of these requirements. They do this day-in, day-out.
Do I have to use ASIC to register my Company?
A Company can be registered either through ASIC yourself or by using a private service provider (PSP). This includes your accountant, your solicitor, or another business that provides online ASIC services.
What’s the benefit of a Private Service Provider?
A Private Service Provider offer their expertise and will be able to provide additional information that is tailored for your needs. They will answer your questions and provide suggestions of extra advice for areas you may not have thought about.
Does registering a Company automatically protect my Intellectual Property?
No. Although it is against the Law to register the same Company name as one already existing, we recommend registering the rest of your intellectual property.
Intellectual Property includes the Trade mark, copyright, patents and designs for your Company name, its products and services. Contact the team at Progressive Legal to assist you with any questions and see what’s right for your Company.
Key takeaways
It is important to do due diligence when registering a Company and consider the points mentioned above.
Progressive Legal provide advice in relation to that Structure and registering Trade Marks properly under the correct legal entities, to give the business the proper legal protection, together with any commercial legal documents, terms and conditions, waiver/disclaimers, privacy policies, employment contracts or independent contractors agreements. Contact us here for more information or call 1800 820 083.
(c) Progressive Legal Pty Ltd – All legal rights reserved (2021)
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Ian Aldridge is the Founder and Principal Lawyer Director at Progressive Legal. He has over 15 years experience in advising businesses in Australia and the UK. After practising in commercial litigation for 12 years in major Australian and International Law Firms, he decided to set up a NewLaw law firm in Australia and assist growing Australian businesses. Since then, he has advised over 2,500 small businesses over the past 6 years alone in relation to Intellectual Property Law, Commercial, Dispute Resolution, Workplace and Privacy Law. He has strived to build a law firm that takes a different approach to providing legal services. A truly client-focused law firm, Ian has built Progressive Legal that strives to deliver on predictable costs, excellent communication and care for his clients. As a legal pioneer, Ian has truly changed the way legal services are being provided in Australia, by building Legal Shield™, a legal subscription to obtain tailored legal documents and advice in a front-loaded retainer package, a world-first. He has a double degree in Law (Hons) and Economics (with a marketing major). He was admitted to the Supreme Court of NSW in 2005.
