Do you know how to start a business in Australia?
Don't worry! Sleek's guide will help you step by step.
- Jul 28, 2022
- 20 min read
At Sleek we are always looking to help entrepreneurs like you, get from go to whoa!
It can be a bit daunting starting a business, especially if it’s your first time.
Remember, same as Rome, your business won’t be built in a day, one step at a time. But that doesn’t mean the process has to be painful or difficult either!
We want to help you start-up quickly, easily and provide valuable guidance through the process.
Overview
- Before starting a business
- Business incorporation
- Choosing a company name
- How will your company operate?
- Decide your business address
- Choose your officeholders and get consent
- What will be your share structure?
- Registering your company
- Registering for GST and other taxes
- Are you ready for business incorporation?
As accounting, tax and company secretary specialists, we’ve got you covered with our easiest, most comprehensive online platform AND the expert advice to help you make the right choices.
It’s so easy! Start with our definitive guide as it takes you effortlessly from your idea of starting a business in Australia right through to incorporation.
Follow the steps or click on the links for a more detailed explanation. It’s got all the information you need to know, no matter what your level of understanding is.
Let's start with your business idea
So, you’ve got this great idea to start a business. Is it a pipe dream or are you onto something BIG?
A few things to think about:
- Is it an online or offline business? or both?
- How much investment will it take to start this business?
- How much money do you think you could earn through the business?
- Is it something that would be in high demand?
Now what?
Step 1: Research your business idea
The first step is to explore your business’ market and industry.
This market research will help you calculate the value of your business idea and whether people are willing to pay for your product or service.
Set clear research objectives and start gathering information from government agencies, industry associations, internet searches, business associates and other entrepreneurs.
Your analysis may lead you to refine, rethink or revise how to start your business idea (and this is a good thing!).
Step 2: Create a business plan
Sure, but what exactly is a business plan, you may think.
It is a comprehensive written guide of your business goals and how you will achieve them. Easy enough, right?
Well, it also covers all aspects of your business, from financials, sales, marketing and operations. This sounds hard but can be super easy if you follow our template below.
As you get going with your business, your business plan will be the roadmap showing you the way ahead to build a profitable business, as well as identifying and defeating hurdles that may hinder your business.
Step 3: Get your finances ready
At the start of your business, it’s likely to have more expenses than revenue, so you will be running at a loss for a period.
But it is alright, we’ve all been there and it is normal.
Estimating the funds required to get you through this period until you start making a profit will help turn your idea of starting a business in Australia into a reality.
Many founders dip into their savings, but you may choose to access some financial assistance. There are the traditional lenders such as banks offering loans and advances. Or you can access funds through friends and family, angel investors, and crowdfunding.
Pursuing the best financing option for your circumstances will help your business succeed.
Business incorporation
Congratulations! You’ve done the hard work to fully understand and investigate your business idea, and how you are going to achieve it.
Well done!
Now it’s time to set up your business structure – we’ll show you where to begin.
Let’s formalise your business – create a new company and register it with the government.
We’ll show you the steps to business incorporation.
Things to think about
Firstly, there are a few elements you will need to think about before you jump to incorporating a company or registering as an ABN holder.
Let’s have a look at them:
What type of business structure is right for you?
This sounds complicated but simply outlines how your business will legally conduct its day to day operations.
You can choose between:
- Trading trust - this is where the business is run through a trust and the trustee is responsible for the business operations.
- Company owned by a trust - This is where the shares of the trading company are held by a trust.
As you can see, this is an important step.
Think fully about the business structure as it will impact on your tax, personal liabilities, asset protection, legal costs, clients, operational risk and reporting obligations.
Choosing a company name
This is the fun part. But there are a few things you need to be aware of when choosing a name.
Most (not all) of the characters on a keyboard can be used within the company name but some words such as ”Bank”, “Incorporated” or “Royal” are restricted. You can’t use offensive words or anything that suggests illegal activity either.
Your company name must not be the same as an existing company or business name registered anywhere in Australia.
To help you check your chosen company name, use Sleek’s company name checker or ASIC’s website to see if it is available.
Simply enter in your proposed company name and it will display if somebody else is already using it. It will also show any closely related company names to help you find an alternative if it is already taken.
How will your company operate?
If you choose a Company for your business structure, before Company registration, you will need to choose the rules by which your Company will follow as it conducts its business.
It will include rules about how shareholders vote for decisions, or how it will issue new shares.
This can be a bit hard to grasp, but stay with us here.
You have a choice between:
- Replaceable rules: where your company follows the replaceable rules set in the Corporations Act. You do not need a written constitution nor the expense of keeping it up to date as the law changes.
- Its own constitution: your company can write its own constitution, and have these filed with your company records. Services like Sleek can provide you with a robust Constitution drafted by external lawyers.
- A combination of the above two.
It’s easy if it’s just you (or one person) as the sole director or member of your proprietary company. Your company does not need to follow either of these rules of operation.
If this changes, then the replaceable rules automatically apply, until such time, you create your own constitution.
Decide your business address
Next, your business will need to provide two physical addresses.
Unfortunately, a PO Box won’t be accepted.
1 - A principal place of business
where your company will mainly conduct its business from. It can be in any state or territory, even if this is a different address from your registered business address. And yes, you can use your home address. Many great entrepreneurs started at home – Melanie Perkins of Canva began in her mum’s living room and Bill Gates in his garage.
2 - A registered office address
where all your business communications and official company notices will be sent. It can be the same as your business address (above), or you can use your accountant’s or lawyer’s address. You will need to get written consent if using your accountant or lawyer, and have these on hand.
Choose your officeholders and get consent
This is a toughie, so we’ll make it as simple as possible.
Officeholders include Directors of your company, and potentially a company secretary.
All companies must have at least one director, and at least one director must ordinarily reside in Australia and be over the age of 18.
If you decide to appoint a company secretary they must be over 18 years of age and ordinarily reside in Australia.
The company secretary is typically responsible for ensuring the administration of the rules of the company are in order.
In the simplest of set-ups, you can be the sole shareholder, director and company secretary, or you can choose to engage others to take on these roles.
Once you have decided your officeholder/s, you will need to get written consent from them and these will need to be filed with your company records.
In 2021, ASIC started requiring Company directors to obtain their own unique Director’s Identification Number (DIN).
Every officeholder’s duty is to follow the Corporations Act by keeping company details up to date, ensuring company records and details are registered with ASIC, and annual reviews are lodged and paid.
What will be your share structure?
Put simply, the share structure determines who owns your company.
The easiest share structure for your company is to issue one share to one shareholder.
Shareholders can be members of the company or its employees or subsidiaries of the company.
You will have three considerations with the share structure to make:
Class of shares:
a share class will give the owner the right to a dividend or the right to vote. Most companies use ‘Ordinary Shares’ which come with no special rights.
Total number of shares:
this is usually determined by the amount of capital a company requires. A company’s capital represents the total number of shares in each class, issued by the company.
Shares paid and unpaid:
each shareholder (or member) may pay the full amount for each share or only a portion. These payments must be recorded in the share structure.
Your company is limited by its shares or it can be an unlimited company that has share capital.
Registering your company
That’s the decision-making part of business incorporation over and done with.
Nice one!
You’re ready to register your company with the Australian Securities and Investments Commission (ASIC). You will be required to pay a registration fee.
You can register yourself, online directly with ASIC or use Sleek, a registered private service provider.
We’ll get together everything you need to make it quick and easy to register your company on your behalf.
When we complete your company registration (it can take minutes!), you will receive your company’s ACN (Australian Company Number) and a certificate of registration.
You can now use your ACN to register for an ABN, GST, PAYG, and/or fringe benefits tax, if you need to.
Once it is set up, your company can conduct business anywhere in Australia without needing to register in individual states and territories.
Registering for GST and other taxes
Oh, one last thing – it is not necessary to register for an Australian Business Number (ABN), but is needed to apply for other taxes.
Registration for an ABN is free and is completed through the Australian Business Register.
You need an ABN to register for:
Goods and Services Tax (GST)
if you sell goods and services, most companies do not need to register until income is over $75k.
Pay As You Go (PAYG)
if you pay wages or salaries.
Payroll tax
a state tax if your total Australian wages exceed the tax-free threshold in each state/territory.
Fringe Benefits Tax (FBT)
if you provide perks and benefits to employees such as entertainment, parking, cars.
