Incorporating a Company in Australia is quick, easy, and can be done online with Vakilsearch in 3 simple steps:
A number of business structures are available in Australia and each has its own regulations. You need to consider certain important factors if you are planning to register a company in Australia. Here, the business owners need to select from the options of incorporating a foreign company, a new company or taking over an existing company.
1. Sole Proprietorship :
Establishing a sole proprietorship business in Australia is easy and cost-effective. In this type of business, the owner has complete responsibility for the entire business operations on his soldiers. He is solely responsible for all the loss and debts occurring from the sole proprietorship business. The owner is the manager and controller of the entire sole-proprietorship business. He is solely accountable to file income tax returns with the help of his TFN (Tax File Number).
2. Limited Liability Company :
This type of a company has a slightly complex structure. It is regarded as a separate legal entity. The shareholders and directors are not held personally responsible for any liability or debt arising out of company operations. The directors are responsible only for the normal business operations of the company.
In Australia, the registration of such a company can be done through the ASIC ( Australian Securities and Investments Commission). The company needs to file its tax returns annually with the ATO.
3. Partnership firm :
In this business structure, two or more people collaborate to start a partnership business. In Australia, the maximum number of partners allowed to constitute a partnership firm is 20.
In general, two types of such business structures exist in Australia- Limited and General partnership firms. Forming a partnership firm is cheap and easy in Australia. However, the partnership firm is not regarded as a separate legal entity. This means, all the partners of the firm are individually liable for liabilities and debts incurred during normal business operations.
The firm needs to file its annual tax returns with the ATO (Australian Tax Office) and an individual Tax File Number is required for this purpose. Instead of the company name, it can also use the ACN ( Australian Company Number) allotted to it. It is mandatory to have GST registration if the annual turnover for the partnership firm is over $75,000.
Lower tax rates - Small Proprietary Limited Companies pay a corporate tax of 27.5%, which is considerably lower than the highest tax rate for individuals, which currently stands at 49 percent at the highest bracket. Thus, conducting business through a private limited company enables you to reduce your firm’s overall tax bill in Australia.
Access to the Australian Market - Incorporating a company in Australia allows you to take advantage of Australia’s large, mixed-market economy. With a 24.6 million population and a GDP per capita of US$53,799.94 as of 2019, the country offers some of the most diverse and lucrative market opportunities in the world. In addition, operating in Australia allows you to take advantage of the numerous free trade agreements, offering truly enormous potential as a foreign investor, with access to Europe, Asia, and America.
Anonymity - One of the best advantages of incorporating a private limited company in Australia is that under Chapter 6D of the Corporations Act 2001, the company is not required to disclose its investors or shareholders. As a business owner, this allows for greater levels of anonymity when operating a business. As regulatory burden is much lower you are able to conduct business freely and without the threat of competition stealing your customers.
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