Turning a great idea into a successful business requires a lot of effort and a huge sum of money. Understanding the initial costs of starting a business is important; otherwise, you risk being caught off guard by unexpected costs that damage your company before it even has a chance to flourish.
Setting Up a New Company in Australia
In Australia, the costs of starting a business can be quite diverse. Costs range from $400 to thousands of Australian dollars, depending on the business structure you choose and the type of business you’re forming.
The ‘how-to’ method for starting a business in Australia varies depending on the type of legal entity you’re establishing. You must first decide on a business structure, then register the company and apply for an ABN.
If you’re buying a franchise or taking over an established business, fees can vary significantly. Costs are determined by factors such as the type of business/franchise and the size of the company – in general, the larger the company, the more expensive it is.
This article will provide you with thorough information on the costs of setting up a company in Australia, including annual company review costs and other corporate governance documentation. Continue reading to find out the cost of setting up a new company in Australia.
Costs of Setting Up a New Company in Australia
You must have an ABN (Australian Business Number) and a business name if you want to set up a new company in Australia. You can’t legally run a business without these.
Australian Business Number (ABN)
In order to start a business in Australia, you must first register and obtain an Australian Business Number (ABN). It is required for both businesses and sole traders. Getting an ABN is completely free.
Business Name Cost
Mandatory for sole traders & companies
The second thing that any Australian startup requires is a business name. For $35, you can register a business name for one year, or for $82 for three years.
Company Registration Fee
Unlike sole traders, companies are required to register as such. The cost of forming a company in Australia starts at $479 and can increase to thousands of dollars depending on the business structure.
The Steps for Incorporating A Company In Australia Are Outlined Below.
Choosing a Name
You must first choose a name for your business before moving to registration. This can be a new name, your Australian company number (ACN), or a name you’ve reserved with ASIC earlier. ASIC charges $51 for reserving a name before registering your business.
You can’t use a name that’s currently in use by another company or registered to another operator. There are additional restrictions on the use of certain phrases in company names that could give the impression that they are affiliated with other government entities. Some examples include the following words:
- Bank
- Trust
- Royal or
- Incorporated.
SET UP A NEW COMPANY IN AUSTRALIA
Deciding on the Type of Company
Choosing the Type of Business
After you’ve chosen an available company name, you’ll need to decide what kind of business you’ll be establishing. You can select from the following options:
- Proprietary company limited by shares (Pty Ltd)
- Unlimited proprietary company limited by a share capital (Pty)
- Public company limited by shares
- Public company limited by guarantee
- Unlimited public company with share capital or
- No liability company.
Company Incorporation Registration Cost
You must pay a company registration fee to ASIC in addition to any professional service fees paid to an individual or business that completes the registration process on your behalf. The following are the fees:
- A proprietary company that has share capital: $506
- Public company with a share capital: $506, or
- Public company limited by guarantee: $417.
Annual Reporting Requirements
After you’ve completed the registration process, you’ll have to pay ASIC a yearly reporting fee. Your annual reporting requirements are required to keep your business running. Your annual reporting requirements will be determined by the type of business you run.
Whether you’re a ‘small’ or ‘big’ company, your reporting needs will change. Small businesses will not be required to file financial reports, but they will be required to pay an annual review charge. Large Pty Ltd companies, on the other hand, will be required to provide financial reports in addition to the yearly review fee. The types of financial reports will differ depending on the type of business.
Conclusion
One should be aware of the costs associated with setting up a company in Australia if you have decided to do so. Get in touch with our experts to know more about forming a company in Australia.
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