How to Register A Company in Australia

How to Register A Company in Australia

Are you an entrepreneur with no idea how you can register your organization in Australia? Here’s a brief that would enlighten you on how you can easily register a company in Australia. To achieve this, you would have to pass and complete these 3 stages; pre-registration, registration, and post-registration. Each stage has steps that would guide you to successfully enroll your company in Australia.

Are you an entrepreneur looking to start a company in Australia. Here are simple steps for how to register a company in Australia.

This stage precedes the main registration and involves the owner prepping the organization before enrolling. The list below has things an owner should set up before filing as a company.

• Company name
• Company Type
• Company Administration
• Company Official

·       Company’s Name

This may look easy but is very important in making sure that no company is bearing your chosen name. Checking the accessibility of a name is now made easier with the Australian Securities & Investment Commission (ASIC) website.

In Australia, to name your firm with misleading words is not allowed and you’ll need the Minister General of Australia to agree with your company to add certain words to your company’s label. Terms like Building society, Trust, University, and Chamber of commerce.

·      Company Type

Organizations in Australia also take form in different structures which includes company, trustee, sole trader, and partnership. Selecting your business structure portrays the level of control the management has in the business, the business clearance and liability. One can also change the company type by expanding or scaling down. 

Sole trader – This is a susceptible structure to set up and it’s managed and operated by the owner with no additional workers. The owner’s personal finance is at risk if business fail.

Partnership – This is a type of business where few individuals or entities agree to run an enterprise together and share its profit. There’s a partnership agreement that seals every of their decision making and other formalities of the partnership. They also assign a member to be their manager of partnership. It is divided into general, limited, and incorporated limited partnerships. 

Trustee Of A Trust – A trust is an agreement in which an individual or company is trusted to hold a business property or assets for the beneficiaries. Whoever holds the asset is called a trustee and he becomes the owner legally. The trustee signs contracts, incur debt and enters into a formal deed with a settlor and appointees to build trust.

Company – This is a complex organization type owned by shareholders and thrives as separate entities permitted by law. Registration is important here unlike the sole traders and partnerships. The cost to build a company may be extremely high but members are not subjected to company debts. There are also different types of company;

• Pty Ltd – Also called Not for Profit, it is a non-profit organization structure that contains a maximum of 50 volunteers or non-employee shareholders with the sole aim to help people.
• Public Company – Also used by non-profit organizations, this company doesn’t pay dividends and it is limited by guarantees. 
• Special Purpose Company – This type of company is only for established to achieve special goals. Just like it is being set up for trustee or charitable purposes.

·       Company Administration and governance

Companies are managed and controlled by the company’s constitution, rules and regulation in Australia. A Constitution is a document established by law that includes rules that controls the relationship between the company’s directors and shareholders.

When there are no constitutions in a firm, they use basic rules. These basic rules found in the Corporations Act are called Replaceable rules.

·       Company officials

The officials in the firm are the public officer, shareholders, occupiers, secretary and  directors. Select your team and ensure that at least one director and one public officer reside in Australia. After they fill the consent form, conclude on the class of share and how many shares they own each.

After completing the pre-requisite for building a company, you can now go further to register the firm. In Australia, a company is required to register under these two entities; the Australian Government Business Registration Service (BRS) and the Australian Securities and Investments Commission.

Australian Securities and Investments Commission (ASIC)

ASIC is an independent Australian government body that controls and directs all organizations in Australia including investment professionals, and financial organization like banks and insurance companies.

It was formulated under the Australian Securities and Investments Commission to implement the stipulations of the Corporations Act.

Australian Government Business Registration Service (BRS)

To register a firm in Australia, the BRS is used for online enrollment. What makes this service unique is that it doesn’t just signup an organization but also offers tax registration service making filing a company, effortless.

After signing up on any of those entities, it is mandatory for companies to have any of these authentication numbers; ABN, ACN. TFN,

Australian Business Number (ABN)

In order for commercial banks, the government, and the community at large to recognize your company, you need an Australian Business Number. ABN is a 11-digit sequence released by the Australian Tax Office (ATO) to all organization types including sole traders, partnerships and companies.

Although ABNs are not compulsory, it is good because it makes tax rate favourable for companies. For example, with ABN you will be given an Australian domain name, able to avoid pay-as-you-go tax and claim goods and services (GST). You’ll also be able to deal with American Taxation Orders and confirm your brand identity to others while ordering or invoicing.

To enroll, visit Australia Business Registry (ABR). Then provide your identity details and that of your business associates in order to register for the Australian Business Number (ABN). To collect your ABN, your organization must be a Corporations Act company.

ACN

ACN is a verification number given to companies when they enroll under Australian Securities and Investments Commission. Unlike ABN, this 9 digit number is allocated only to a company and not to sole proprietorship and partnerships.

Once your filing in ASIC is processed and completed, the ACN will appear on the certificate of incorporation issued by ASIC and on other documents like Company letterheads, Accounting statements such as invoice, receipts that are not generated by the machine, official company notices, cheques, and other paperwork.

However if your company enrolled for an ABN and displayed it on documents, then you don’t need to display your ACN.

Tax File Number (TFN)

Tax File Number is another set of numbers used to ensure that the company registered for the right taxes. So, a company will get a separate Tax File Number (TFN) while a sole trader can simply use individual TFN. Application for the TFN is open online.

Once your company is registered, you can move on with other matters like maintaining various statutory company registers, opening a bank account. registering for the Goods and Services Tax (GST) if your GST turnover is more than the turnover threshold of AUD 75,000.

What are the important details needed to register a company?

To register your company in Australia online, provide the information of each of your company officials. The detail needed from the shareholders are the Full name, address and number of shares while that Directors & Secretaries is Full name, home address, date and place of birth of each person. Then the address of the registered office and principal place of business are other important details.

Can I cancel my ABN?

Yes, if you’re closing your business, or changing your business structure from sole trader to a company or vice versa.

What is GST?

Goods and services tax (GST) is a 10% tax on the consumption of goods and services sold in Australia. Your company can be required by tax laws to pay GST on any goods and services it supplies.

Is it okay to use my home address for business? 

Yes, if you run your business in the same location where you reside. The address you’re required of you will be used when they search for your company, so you need to tender the correct address.

How long should I keep tax records? 

Since Section 286 of the Corporations Act mentions that financial records should be held for at least 7 years, keep your tax records for 7 years. 

How many Shareholders and shares can I issue?

A company should have maximum of 50 shareholders. While there’s no limit to the number of shares one can issue, you can issue about 10 -15 shares for a registered company. Nevertheless, you should seek advice before choosing the number of shares to issue.

Company registration in Australia may look complex and have several requirements that must be completed but has many benefits. Australia has a wide range of incentives for businesses to encourage investors from abroad.

When you enroll, you get entitled to an investment allowance that reduce your tax when you purchase capital machineries. Australia also has a diverse market and good connection with Asian countries which makes registering beneficial to you. Start enrolling your company now!