A company that wants to start up in Australia must take these six steps listed below before beginning operations: business name, name, and address of the company, directors/members of the company, lawyers to be appointed, Australian Business Number (ABN), and registration with the Australian Taxation Office. In this article you will find information about what government registrations should you know about when starting a company in Australia.
What is a Business Entity?
A business entity is a legal construct used in many countries to organize and manage a company. In Australia, a business entity is defined as an entity that is formed or registered under the Corporations Act 2001 or any other similar laws in other jurisdictions. This blog further discusses about Australia Startup Registration process in detail.
There are two main types of business entities in Australia:
- Proprietary
- Public.
A proprietary entity is owned and operated by one or more individuals. In contrast, a public business entity is owned by the community as a whole and operated for the benefit of the community. Public business entities can be either hybrids or pure publics. A hybrid public business entity is a public company that also has some private elements (for example, ownership by specific individuals). A pure public business entity has no private elements.
Visa Requirements to Start a Business in Australia
The Australian government grants visas for eligible foreign individuals looking to start a business in Australia. The following are the visa options available for foreign citizens interested in starting a business in the country:
Business Innovation and Investment (Provisional) Visa
Foreign entrepreneurs with business skills can apply for this visa, allowing them to operate new or existing businesses in Australia.
Before applying, the entrepreneur must be nominated by a territory or state government. The application process involves –
- Submitting an Expression of Interest (EOI) through the Skillselect online service
- Waiting for an invitation to apply
- Meeting specific requirements and providing supporting documents.
This provisional visa is valid for four to five years, and holders can apply for a permanent visa once they meet the necessary criteria.
Business Innovation and Investment (Permanent) Visa
Once the requirements of the provisional visa are met, entrepreneurs can apply for the permanent visa. To get the visa, one must fulfil additional criteria such as financial thresholds, character checks, and health tests.
This visa grants permanent residency in Australia to the entrepreneur and their family, with the possibility of applying for citizenship in the future.
Regulatory Authority/ Body for Company Registration in Australia
The primary regulatory authority for company registration in Australia is the Australian Securities and Investments Commission (ASIC). It oversees the process of incorporating companies and ensures compliance with relevant laws and regulations.
Types of Business Structures in Australia – Company Registration in Australia
Australia allows both local and foreign entrepreneurs to establish companies within its borders. The country offers three main types of business structures:
Proprietary Limited Companies
- This structure, similar to a private limited company or LLC, is commonly adopted by foreign investors starting businesses in Australia.
- A proprietary limited company requires at least one resident director and can have a maximum of 50 shareholders.
- These companies can be fully foreign-owned and have an initial capital requirement of just $1.
- Proprietary limited companies must register for Goods and Services Tax (GST) if their annual turnover exceeds AUD 75,000.
Public Companies
- Public companies are authorized to raise funds from the general public by offering shares for sale, typically listed on stock exchanges.
- They must have at least one member, a minimum of three directors (with at least two being Australian residents), and appoint an auditor.
Partnership, Trust, Branch Office, and Representative Office
- Partnerships are commonly used by accountancy and law firms, while trusts are adopted by small family-owned or larger businesses with multiple family members.
- Branch offices are extensions of foreign parent companies, requiring registration with ASIC and compliance with local regulations.
- Representative offices are suitable for research and market analysis purposes but cannot engage in commercial activities.
Checklist for Company Registration in Australia
Before initiating the company registration process in Australia, tick off the following checklist:
- Determine the company structure, such as limited by shares or unlimited with a share capital.
- Decide on using replaceable rules or adopting a constitution.
- Choose a suitable company name that complies with Australian regulations.
- Nominate the state or territory for company registration.
- Determine the registered office address and principal place of business.
- Check if there is an ultimate holding company associated with the company.
- Identify the officeholders (directors and secretaries) and gather their necessary details.
- Decide on the share structure, including share class, total number of shares, and amounts paid or unpaid on shares.
- Ensure written consent from appointed officeholders is obtained and maintained
- Consider any additional requirements specific to your business structure, such as resident director requirements for proprietary limited companies.
- Prepare necessary documentation, including consent forms, identification documents, and share allotment forms.
- Register the company with the Australian Securities and Investments Commission (ASIC).
- Obtain necessary permits, licenses, or certifications based on the nature of your business activities.
- Comply with tax obligations, including registering for the Goods and Services Tax (GST) if applicable.
- Keep proper records and maintain compliance with ongoing reporting and disclosure requirements.
Who Can Become an Australian Company Director?
An Australian company director can be anyone who is 18 years or older and has a business interest in the company. The company must also be registered with ASIC and must have at least one director.
What are the Requirements for Registering with ASIC or ACN Australia?
Registration with ASIC is mandatory for all companies with a trading name, such as company name, registered trademark, etc.
You must also register with ACN Australia if you are,
- The sole trader or head of a business that is not incorporated or carries on business as a partnership
- The representative of a foreign company that is carrying on company in Australia.
There are a number of other requirements which must be met, depending on the type of company. For example if you are a company limited by shares, you will need to lodge an annual return and give notice of any changes to your articles of association.
How Do I Register My Company in Australia?
If you are thinking about starting your own business in Australia, you must register your company with the Australian Business Register. The process of registering a company can be complex, but there are a few vital legal essentials you will need to take into account. Here are some key points to keep in mind:
- Register your company with the Australian Securities and Investments Commission (ASIC)
- File an annual corporate return and financial statements with ASIC
- Make sure your company has valid directors and shareholder authorisations
- Register your company name with the Australian Trade Marks Office (ATMO)
- Protect your trademarks by registering them with the Australian Patent Office (APO).
Determine the Type of Business You Are Setting Up
The first step is to determine the type of business you are setting up. If you are setting up a sole trader or partnership, you will not need to register your company with the Australian Business Register (ABR). However, if you are setting up an incorporated company, such as a limited liability company (LLC) or a corporation, you will need to register with the ABR.
Choose an ABR Registration Number
Once you have determined the type of business you are setting up, the next step is to choose an ABR registration number. The registration number must be unique and must be allocated by the ABR. You can choose either a New Company Number (NCN) or an Existing Company Number (ECN).
Conclusion
When starting a company in Australia, it is important to understand the legal essentials. This article provides an overview of the most important laws and regulations you need to know when establishing your business in Australia.
FAQs
Why should an investor opt for company registration in Australia?
Investors are attracted to register their companies in Australia due to several factors. These include Australia's extensive network of Free Trade Agreements, Double Taxation Avoidance Agreements (DTAAs), a well-developed financial sector, a stable business environment, and access to a skilled labor force.
Do I need to have a director who is a resident of Australia?
Yes, it is a requirement to have at least one director who is a resident of Australia.
Is there a minimum capital requirement for company registration in Australia?
The minimum capital requirement varies depending on the chosen business structure.
Is having a registered office in Australia mandatory for company registration?
Yes, having a registered office in Australia is a prerequisite for conducting business in the country.
How long does it typically take to register a company in Australia?
Filing the application form usually takes 1-2 hours, and the registration of the company itself takes approximately two business days.
What is the corporate income tax rate in Australia?
The corporate income tax rate in Australia is 30% of taxable income for all companies. Small and medium enterprises with an aggregated turnover below AUD 50 million enjoy reduced corporate income tax rate of 25%.
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