There are many ways that a business can be structured, and before you begin the process of setting up a new company, it’s essential to know how this is achieved.
A business structure with which most people are familiar is a company. Registering with ASIC means the company can operate across Australia without registering for each individual state and territory. Before moving forward, the company owners will also need to register an Australian Business Number (ABN) and is easily be completed online.
If you have decided to move forward as a company for your business structure, the steps below are what you need to move forward. Learn more about setting up company in Australia on this legal website.
- Setting the company up yourself or using a service provider?
There are two ways to register yourself with ASIC, either directly with them or through a service provider. If you are going straight to ASIC, you can access the appropriate form 201 from their website and paying the fee online. Otherwise, some service providers can register your company. They have the relevant software that deals directly with ASIC, and you can pay the fees through them also. The service provider option can be completed online or using hard copies and pay a fee to the service provider and ASIC.
- Choosing a business or company name
There is a variety of information to consider when choosing either a company or business name. You should be mindful of the following:
- Choosing a company name is first on the agenda. If you don’t choose a name, you can use your Australian Company Number (ACN) in its place.
- Within Australia, you must present your company’s legal status with your business name. E.g. Most companies are either pty ltd or proprietary limited. These companies are where members legal responsibilities have limitations based on the company’s number of unpaid shares.
- Company names can only be chosen if they are available. There is a search function available to search and reserve a business name before registering your company.
- Be mindful that there are some limitations on words and phrases used in the name of your company.
- Choosing rules for your company
Applying rules that govern your company is the next step, which is usually:
- A constitution; or
- The replaceable rules from the Corporations Act. This means it is not required the company has its own written constitution;
- Or a combination of both.
- Shareholders and Directors
Moving forward, choose your shareholders (members), and directors. The directors are those that have control of the company. Directors need to be at least 18 years old, and at least one director needs to be an Australian resident.
Each person that has agreed to be a director needs to give written permission to indicate that they agree to be a shareholder of your company.
- Share Structure
The next step involves how many shares and what class of shares each shareholder will own. The most common is ordinary shares.
- Choose which state or territory to register your company
Your company can be registered in any state or territory within Australia and must be done in one of them. Depending on varying factors, you may be required to register for GST, and when you do so, you will receive a certificate of acknowledgement.
- Principal place of business and registered office
When registering your business, you need to appoint a registered office and principal place of business. When doing so, you must gain the occupier’s consent if the registered office is not occupied by the company.
- Relevant paperwork or online form completion
Once you have made it through each of these steps and have obtained required consents, you can complete any relevant paperwork or the online form to move forward.
When going through the steps to decide to set up a company, it requires planning and know-how. Essentially it isn’t too difficult, as long as you go step-by-step through our checklist. If you need to register a company and require assistance, reach out to an agency that can help you fill out the relevant information to begin your journey.
Are there legal requirements for setting up a company in Australia?
Setting up a company within Australia, regardless of the state or territory requires you to make decisions around corporate structure and register with ASIC. The structure primarily impacts what legal requirements there will be of your company.
How do I know what structure is right for my company?
Determining your structure, you must consider what’s most practical for business growth. If your plan is to have shareholders or directors, a company structure is more practical long-term than a sole trader.
How do I register with ASIC?
Registering with ASIC is relatively straightforward and can be achieved directly through their website or with a company registration provider.
What’s the best way to get assistance drafting legal documents to set up my company?
For any legal documents, a business lawyer should always be consulted and prepare your required documents.
Should I consider anything in particular when deciding on a business name?
The only consideration is to ensure that no one else has a business with the same name.