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Setting Up a Company in Australia: The Ultimate Guide

Essential Guide to Setting Up a Company in Australia
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Setting up a company in Australia? If you’ve never set up a company before, the prospect of establishing one might seem challenging. However, with the right guidance and information, the process is simple and rewarding. 

In Australia, over 2.5 million businesses are registered and actively trading, and the country is known for its robust and transparent regulatory framework, making it an attractive destination for entrepreneurs.

In this essential guide to setting up a business in Australia, we’ll walk you through the critical steps, from choosing the ideal business structure to preparing and submitting the necessary documents.

Join us, as we explore important topics like: 

– Registering a business

– Selecting a company name

– Ensuring details are correctly filed with the Australian government business registration system

– Understanding company constitution, and replaceable rules for businesses. 

With expert tips and insights, this guide ensures that both seasoned entrepreneurs and newcomers are well-equipped for business success in the vibrant Australian market.

Setting up a company in Australia 101

If you’re planning to start a business in Australia, one of your first steps is setting up a company. It’s crucial to get familiar with the legal stuff, choose from various business structures available, and identify important roles you’ll need on your team before getting started.

The process of setting up a company in Australia can be simple. With the right guidance and a clear understanding of the steps involved, you can navigate the process with confidence.

Legal requirements for setting up a company

Kicking off the company registration process requires knowing some key legal details. You’ll need to come up with an original company name and trademark, register for taxes, and make sure you have all required licenses and permits in place.

One of the first things you’ll need to do is choose a company name that’s not already in use and does not overlap any existing trademarks. You can search for available names using ASIC’s company register. Keep in mind that your company name must also meet certain legal requirements, such as not being offensive or mislead people.

Business structure options for setting up a business 

Choosing the right business structure in Australia means picking from a few main options. You could go with being a sole trader, start a partnership or joint venture, set up a special purpose trust, or create a private company.

Each business type comes with its own pros and cons. If you’re after limited liability protection and want to attract investors through share sales, setting up as a company could be your best bet.

Registering your company

Once you’ve chosen your business structure and company name, it’s time to register your company with ASIC. This involves applying for an Australian Company Number (ACN) and an Australian Business Number (ABN).

It’s essential to keep track of important company info such as its registered office address, share structure, and who holds which offices. Accurate records will come in handy when dealing with ASIC or other government bodies later on.

Appointing key roles

Starting a company in Australia means you need to pick some key people for important roles like directors, secretaries, and public officers. These folks will handle the company’s operations and make sure everything follows the law.

As an officeholder in a company, it’s crucial to understand what the Corporations Act requires from you. You should act with the company’s best interests at heart, maintain proper documentation, and openly disclose any potential conflicts of interest.

Starting a company in Australia might feel overwhelming at first, but with the right help and planning, it can be pretty straightforward. By knowing the legal requirements, picking the best business structure for your needs, and appointing key roles wisely, you’ll soon have your Australian business up and running.

Legal requirements for starting a company

To get your company up and running legally, you’ll first need to decide on a name. After that, make sure you’re registered for taxes and secure all the necessary licenses and permits.

1. Choosing a company name

Choosing a company name is one of the first and most important steps in setting up your business. Your company name must be unique and not already in use by another business. It also can’t be anything which is considered offensive or mislead people in any way.

To check if your desired company name is available, you can search ASIC’s company register. If the name is available, you can reserve it for up to two months while you complete the rest of the registration process.

2. Registering for taxes

Once you’ve chosen your company name, you’ll need to register for taxes with the Australian Taxation Office (ATO). This involves applying for an Australian Business Number (ABN) and registering for Goods and Services Tax (GST) if your annual turnover is expected to exceed $75,000.

You may also need to register for other taxes, such as Pay As You Go (PAYG) withholding tax if you have employees, and Fringe Benefits Tax (FBT) if you provide certain benefits to your employees.

3. Obtaining necessary licenses and permits

Depending on your industry and location, you may need to obtain specific licenses and permits to operate your company legally. For example, if you’re starting a restaurant, you may need a food business license from your local council.

Before you kick off your business, it’s smart to look into what approvals you’ll need. The Australian Government’s Business Registration Service can help you figure out which licenses and permits are necessary.

By handling these legal steps early on, you’re setting your business up for smooth sailing and steering clear of any future legal hassles.

Choosing the right business structure

choosing the right business structure in australia

FAQs in relation to setting up a company in Australia

When you are setting up a company in Australia, picking the right business structure is crucial. This choice affects your legal status, taxes, and personal liability.

Sole trader

A sole trader is the simplest and most common business structure in Australia. As a sole trader, you are personally responsible for all aspects of the business, including any debts and losses. While this structure offers simplicity and control, it also means that your personal assets may be at risk if something goes wrong.

Partnership

A partnership involves two or more people running a business together and sharing profits and losses. Partnerships can be general, where all partners are equally responsible for the business, or limited, where some partners have limited liability. It’s important to have a written partnership agreement outlining each partner’s roles, responsibilities, and share of profits.

Trust

A trust is a setup where a trustee looks after assets for someone else, known as the beneficiaries. There are two main types: discretionary trusts give trustees flexibility in how they distribute money and property, while unit trusts assign fixed shares to each beneficiary. Trusts can help protect your assets and offer tax perks but need thoughtful planning.

Company

Before setting up a company in Australia or anywhere, we need to understand that a company stands apart from its owners as a separate legal entity, providing limited liability protection. These companies can be either private or public, each with unique reporting and disclosure rules. While setting up a company involves more steps and costs than other business structures, it offers perks like easier access to capital and the ability to sell shares to investors.

Picking the right business structure involves thinking about your goals, personal liability, tax rate, and how much paperwork you’re willing to handle. Our expert accountant at Sleek can really help you figure out what fits best for your situation. Book a free consultation call on Sleek and discuss your requirements today! 

Registering your Australian company

After picking your business structure and naming your company, the next step is to register with the Australian Securities and Investments Commission (ASIC). You’ll need to apply for an Australian Company Number (ACN), get an Australian Business Number (ABN), and make sure you register your business name.

Professional assistance to set up your company in Australia: With its local offices in Sydney and a team of seasoned experts, Sleek can help with everything from starting your company and providing a registered office address to handling payroll, compliance, accounting, and more. For just $399 per year, Sleek offers quick and reliable incorporation. With an average rating of 4.9 on Trustpilot and Google, customers love their service and support. Here are some key benefits:

Quick Registration: Register your PTY LTD in minutes.

Complete ASIC Compliance: All your ASIC compliance needs taken care of, with documents managed for you.

Unlimited Support: Get unlimited support from senior ASIC agents.

Best for: Company registration, fast service, registered office services, payroll, and expert local customer support.

Applying for an Australian Company Number (ACN)

An ACN is a unique 9-digit number that identifies your company. You’ll need to apply for an ACN through ASIC, which can be done online or by submitting a paper form. When applying for an ACN, you’ll need to provide details about your proposed company, such as its name, registered office address, and officeholders.

Applying for an Australian Business Number (ABN)

An ABN is an 11-digit number that identifies your business to the government and community. You’ll need an ABN to register for GST, claim tax deductions, and avoid pay as you go (PAYG) tax on payments you receive. You can apply for an ABN online through the Australian Government’s Business Registration Service.

Registering your business name

If you want to trade under a name other than your company name, you’ll need to register a business name with ASIC. Your business name must be unique and not already in use by another entity. You can conduct an availability search for business names using ASIC’s business names register.

Protecting your company name

If you’re serious about protecting your company’s identity, consider registering a trade mark with IP Australia. This grants you sole rights to use your company’s name and logo for all related goods and services, making it easier to stop others from copying or causing confusion among consumers. This will also help you avoid anyone misusing your company name for any illegal activity.

When you register your company, keeping up-to-date company records is crucial. Make sure to document details like the registered office address, share structure, and names of officeholders. This information must be regularly submitted to ASIC; neglecting this duty could lead to penalties.

Follow these steps and seek professional advice when necessary to make sure your Australian company is properly registered and ready for success. Whether you’re a sole trader, setting up a proprietary company, or any special purpose companies, understanding the legal requirements, following these basic set of regulations and picking the right business structure will help you conduct business with confidence.

Key Takeaway:

Starting a company in Australia involves choosing the right business structure, registering with ASIC, and appointing key roles. Understand legal requirements like selecting a unique name, obtaining necessary licenses, and ensuring tax registration to avoid future issues.

Appointing key roles in your company

Starting a company in Australia means you need to appoint key people. You’ll have to pick your company directors, find someone for the role of company secretary, and choose a public officer. These roles are essential for keeping things running smoothly and staying on the right side of the law. From my experience starting a business in Australia, picking the right team is vital. It’s more than just assigning titles; it’s about choosing capable and committed people who will drive your company forward.

Responsibilities of company directors

Company directors make the big decisions for your business. They handle daily operations, map out long-term goals, and keep everything in line with legal rules.

The role of a company director carries heavy responsibilities. They are legally required to act in favor of both the firm and its investors, facing potential personal repercussions should they breach their duties.

When picking company directors, aim for those with the right mix of experience and skills. They should show good judgment, act with integrity, and stick to ethical standards.

Appointing a company secretary

Although not required for proprietary companies, having a company secretary can be really beneficial. This person makes sure the company follows legal rules by keeping accurate records, filing documents with ASIC, and setting up meetings for directors and shareholders.

A good company secretary takes the weight off your directors by managing all those nitty-gritty admin details that could easily be overlooked. Look for individuals who are highly organized, detail-oriented, and well-versed in corporate governance when you’re appointing one.

Appointing a public officer

When you start a company, appointing a public officer is crucial and needs to be done within three months. This person will handle all communications with the Australian Taxation Office (ATO) and make sure your business meets its tax responsibilities.

When picking a public officer, make sure they’re at least 18 years old and live in Australia. It’s best to go with someone who is dependable, trustworthy, and knows their way around tax issues.

Before you can appoint someone as a company director, secretary, or public officer, you’ll need to get their written consent. This means having each individual sign a consent form beforehand.

It’s smart to discuss roles and responsibilities early when starting a company in Australia. Make sure everyone knows what they need to do and is committed to doing their best.

Understanding company numbers and identifiers

When you’re starting a business in Australia, you’ll encounter various numbers and identifiers. These are essential for recognizing your company and its key members. Knowing what each number represents and how it’s used is crucial.

Australian Company Number (ACN)

Your Australian Company Number (ACN) is a special 9-digit identifier given to your company by ASIC during registration. You need to include this number on all official documents and any correspondence related to the business.

Your ACN acts like your company’s fingerprint, setting it apart from others. You’ll need to have this number handy when dealing with government agencies, banks, or other businesses.

Australian Business Number (ABN)

Your ABN is an 11-digit number that identifies your business for tax purposes. Issued by the Australian Business Register (ABR), it’s what you use when dealing with the ATO and other government agencies.

Your ACN is tied specifically to your company, but you can use the same ABN for all business activities, whether you’re a sole trader or in a partnership. An ABN is essential if you need to register for GST, PAYG withholding, and other tax-related obligations.

Director Identification Number (DIN)

The Director Identification Number (DIN) is a recent addition from 2021. It’s a unique set of 15 digits given to each company director to help fight against fraudulent practices such as phoenixing.

Before stepping into the role, every company director needs to get a DIN. This identification number sticks with them for life, no matter how many times they switch companies or even if they leave their directorship behind.

If you’re a company officeholder, you need to grasp how various numbers like ACN and ABN fit into your role. Track them accurately along with the DINs of all directors so they’re always ready when needed in any official dealings.

Conducting business as an Australian company

Once you’ve set up your company and appointed key roles, you’re ready to start conducting business as an Australian company. But before you get started, there are a few important things to keep in mind.

Ensuring company compliance

As a company officeholder, you’re in charge of making sure your business follows all the necessary laws and rules. This means you need to keep accurate financial records, file yearly tax returns on time, and inform ASIC about any changes to your company’s details.

Make sure you’re keeping track of all necessary duties. Falling behind could mean big trouble like fines or lawsuits for both the business and those in charge. Professional help is advisable if there’s any uncertainty.

Protecting your company’s reputation

Your company’s reputation is a precious asset. As a company officeholder, you need to make sure that all business actions are both ethical and legal.

Steer clear of anything that might deceive others or come off as inappropriate or unlawful. Always stay transparent in your interactions with clients, vendors, and anyone else involved. Handle issues and feedback swiftly and justly.

Staying informed and adaptable

Things are always changing in the business environment, making it vital to be informed and adaptable. You need to keep up with any legal changes affecting your company while also being mindful of shifts within your industry or market.

Adapting to new ideas means sometimes changing course with your business plans. If you’re a company officeholder, it’s up to you to lead these shifts confidently and decide what’s best for both the firm and everyone involved.

Setting up a company in Australia has its challenges, but the rewards can be tremendous. Make sure your company follows all legal rules, maintains a good reputation, and stays flexible with changing times to achieve long-term success. It isn’t always smooth sailing, but with the right know-how and support, setting up a company in Australia is doable. Get on a free consultation call to ask for advice from Sleek’s experts. Our professionals have helped over 450,000 small and emerging businesses till date and we will be happy to guide your for all your all requirements regarding setting up a business in Australia. With Sleek by your side, you can easily build a successful business.

Key Takeaway:

Appointing key roles like directors, a company secretary, and a public officer is essential for smooth operations and legal compliance in Australia. Make sure you choose qualified individuals committed to their responsibilities.

Conclusion

We’ve learnt that whether you ordinarily reside in Australia or not, setting up a company in Australia is a journey that requires careful planning, attention to detail, navigating company constitution replaceable rules and a willingness to learn. But with the right mindset and the proper guidance, it’s a journey that can lead to incredible opportunities and success.

Deciding on a business structure isn’t something to rush as this decision will be ultimately responsible for a lot of the outcomes regarding operations, tax, profit sharing etc. Plus, don’t underestimate how crucial it is to get every piece of documentation just right and as best practice make sure your always tax compliant. Conduct an annual review to ensure order and compliance for your business.

Need help in setting up a business in Australia? Our seasoned professionals at Sleek are ready to assist you with all the requirements for business registration, accounting and tax compliance as per local laws and regulations. Simply choose the free consultation call option on our website, and our experts will understand your requirements and offer a solution that best fits your needs. Your Australian business adventure awaits!

The cost starts at around $500 for registration with ASIC. Additional expenses can include legal fees and obtaining necessary licenses.

Yes, one person can be both the sole director and shareholder of an Australian proprietary company.

You need an Australian Company Number (ACN), an Australian Business Number (ABN), and registered office details. Also required are directors’ consents.

You must register your business name, get any relevant permits or licenses, comply with tax obligations like GST, and follow employment laws if hiring staff.

Sleek is the preferred partner of entrepreneurs
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