Company Registration in Australia
Besides being a tourist hotspot, Australia is best known for its unprecedented business potential. Due to robust academic and politically stable environment, Australia fosters a skilled workforce that serves diverse industries. Being a member of the Regional Comprehensive Economic Partnership (RCEP), Australia eases the blow for indigenous and global companies seeking growth. If you are about to launch a new venture in this part of the world, get ready to encounter complex bureaucratic hurdles. With that being said, this blog explores the legal aspects of registering a company in Australia alongside paperwork and other key details.
Business Structures for Company Registration in Australia
There are a couple of business structures to choose from when applying for company registration in Australia. These include:
Proprietorship Company:
Also known as a Proprietary Limited company (“Pty Ltd”), this structure is a great fit for overseas investors. Typically, one resident director is required to incorporate such a firm, but there is also a provision for appointing a nominee director if the former requirement ceases to exist. Other key incorporation requirements include a minimum share capital of $1 and name reservation.
Australian Public Company:
Unlike Pty Ltd companies, Public companies are more scalable as they allow for share trading, leading to enhanced capital procurement. The management of such companies is the key decision-maker. For incorporation purposes, such companies must have:
- At least 3 directors, out of which 2 must have an Australian residency.
- Availability of a Company Secretary and Public Officer for tax purposes is mandatory.
- Name Reservation.
Australian Branch Office:
Foreign companies can open a branch office in Australia via the Australian Taxation Office or ASIC. The branch office must have an agent who can interact with authorities as and when required. The registration of the brand office is mandatory as it helps make it legitimate as per the local laws. An income generated by a branch office attracts taxes, mandating the submission of financial reports to ASIC annually.
Partnership Firm:
Partnership is a popular business structure, preferably among accounting and legal services. General partners attract unlimited liabilities and jointly address any obligations or debt. Out of two partners, one must be an Australian for incorporation purposes. As such, these firms do not attract taxes directly though owners are liable to pay personal taxes and declare their profit.
Australian Representative Office:
The Australian Representative Office, as the name suggests, is an extended arm of the parent company that can only undergo non-commercial activities such as market research and report evaluation.
Trust:
Trust is a popular business structure among entities helmed by family members. It ensures seamless allocation of resources and funds among beneficiaries, overcoming ambiguity and disputes. Trusts are categorized as discretionary trusts, which are chosen by the family-owned businesses, and unit trusts. The latter is preferred by larger entities run by multiple family members. The unregistered trust does not pay taxes directly; it is the beneficiaries who are liable to address tax implications. Trusts with a registered deed do not require authorities’ approvals.
Documents Required for Company Registration in Australia
- Information on shareholders and directors
- Completed Application Form (Form 201)
- Company Constitution or Replaceable Rules
- Submission of Form 410 for name reservation
- Australian Company Number (ACN)
- Evidence of the registered office address (e.g., lease agreement or land title certificate)
- Name Reservation
- Details about the Registered Office Address
- Valid identification documents for incorporators, directors, and officers
Steps to Secure Company Registration in Australia
Below are the steps that can help you secure company registration in Australia:
Step 1: Determine the Company Type
Start by deciding if a company structure aligns with your goals and requirements. Use tools like Business.gov.au’s “Help me decide” to opt for the ideal structure. Remember, the business structure you choose will define how much taxes you will pay and the compliance you will cater to. Take time to weigh each structure and choose wisely.
Step 2: Choose Your Company Name
Select a unique name that is legitimate in the eye of the law, adhering to naming regulations. Besides, making your name legally fit, ensure it has market appeal so that it can resonate with your target audiences. Speaking of legal implications, do not use terms like “bank,” “trust,” or “Royal,” as they seek government approval. Form 410 is used to reserve the company name. Do not forget to visit the IP Australia website before finalizing the name for the reservation.
Step 3: Set Up Company Operations
Decide on your company’s governance. You have various choices in this regard. You can leverage replaceable rules from the Corporations Act, create a bespoke one, resonates with your requirement, or a mix of both. Companies with only one officeholder do not need to comply with this requirement.
Step 4: Understand Your Obligations
Companies with a director or officeholder must comply with the Corporations Act. Besides, there are some other key implications one must understand when going for company registration in Australia. These include:
- Keeping company information up to date
- Managing records that influence the company’s decision-making and future
- Securing director ID
- Ensuring annual and event-based compliance.
Step 5: Obtain Consent from Company Members
Before making the Director or Secretary pursue their tasks, secure their written consent as a part of legal compliance. At least one member should be indigenous and attained a legal age. If the business place does not belong to the company, prompt the property owner to share the written approval.
Step 6: Register Your Company
Register your company using the Australian Government’s Business Registration Service (BRS), which streamlines various business and tax registrations. On the other hand, use a private service provider (aka PSP) like an accountant for online registration. For specific company types with special conditions, a paper-based application may be required.
Points to Ponder When Going For Company Registration in Australia
- Companies with an annual turnover exceeding AUD $75,000 must register for GST, requiring an Australian Business Number (ABN).
- The application for an ABN can be submitted online through the ABN Business Entry Point, with the ABN issued upon successful submission.
- The Australian Tax Office (ATO) will confirm receipt of the ABN application within 28 days. Without an ABN, GST applies to all sales, and penalties may be incurred for overdue payments.
- Companies earning less than AUD $2 million annually are subject to a corporate tax rate of 27.5%.
- This information serves as a general overview and should not replace professional advice. For specific guidance, seeking individualized advice is recommended to ensure compliance with applicable laws.
Conclusion
Securing Company registration in Australia is the first step toward transforming your dream of launching a new venture into reality. Once you have secured this registration, you will become eligible to run your business affairs. If you need any assistance concerning business operations or legalities, connect with Adviso without thinking twice.
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