Company Registration in Australia - an Overview
In Australia, there are several corporate structures that each have their own set of rules. Registering a company in Australia is now very easy through Vakilsearch. However the complete company incorporation process in Australia demands multiple crucial aspects that have to be taken into account. Vakilsearch can complete the whole process of company incorporation easily, that too with not much hassles.
Australian Business Entity Types
1. Sole Proprietorship :
Starting a sole proprietorship business is simple and affordable in Australia. In this kind of business, the owner is entirely in charge of the operations and employees. All losses and debts resulting from the sole proprietorship business are completely the owners responsibility. The sole proprietorship business is managed and controlled by the owner. Using the Tax File Number (TFN) every business owner should file for income taxes in Australia.
2. Limited Liability Company :
This sort of business has a sophisticated organisational structure. The company is treated as a legal entity. Any responsibility or debt stemming from business operations is not held against the owners or directors personally. The company's routine business activities are the sole responsibility of the directors. Australian security and investment commission overseas company incorporation in Australia. Each year, the business must submit its tax returns to the ATO.
3. Partnership firm :
In this form of organisation, two or more individuals work together to launch a partnership business. As per Australian government rules and regulations a partnership firm can have up to 20 members.
Company Arrangements in Australia
There are primarily two sorts of these company arrangements in Australia namely Limited liability companies and general partnership firms.
Every organisation, irrespective of the type, should file its income tax returns with the Australian tax office. To file the ITR returns it is crucial to have an individual tax file number. The business may also use ACN (Australian Company Number) assigned in place of the company name. If a partnership firm's yearly sales exceed $75,000, GST registration is required.
Advantages of Forming a Business in Australia
Reduced tax rates : The maximum tax rate for individuals, which is now 49 % at the top bracket, is far lower than the corporate tax rate for businesses, which is 27.5%. As a result, using a private limited company to do business allows you to pay less tax overall for your company in Australia.
Access to the Australian Market - By forming a business there, you can benefit from the country's sizable, mixed-market economy. As of 2019, the nation had a population of 24.6 million people and a GDP per capita of US $53,799.94. It provides some of the most varied and lucrative market opportunities in the entire world. Furthermore, doing business in Australia enables you to benefit from the many free trade agreements, which present great potential for foreign investors with access to Europe, Asia, and America.
Anonymity - As per Chapter 6D of the Corporation Act of 2001 the companies registered in Australia and functioning in Australia are not permitted to reveal information regarding the investors or owners. This gives you more privacy as a business owner when running a company. You can operate your business freely and without fear of the competitors taking your consumer thanks to the significantly reduced regulatory load.
Steps to Incorporate a Company in Australia?
Company name: It's crucial to confirm that the suggested name is available before applying for Australian company registration. You must choose a short, distinct name for your business that is neither offensive nor misspelled.
Business type : If the business type is a proprietary form then the word ‘proprietar’ or its abbreviation ‘pty’ should always be displayed. The business may use the Australian Company Number (ACN) assigned to it as its name. ASIC issues a firm with an ACN, which is a distinctive number.
Filling out the application - Application Form 201 is sent to the ASIC at this phase. This makes it mandatory for registering an Australian company through ASIC. Each shareholder and director must submit a properly completed form together with written consent to serve as a shareholder or director of the company.
Having directors: Subsequently, it is mandatory to have at least a single director who is an Australian national. The business stands liable for making sure that all the compliances are adhered to along with the tax regulation.
To serve as a director or shareholder of the company, each individual must express their written consent. Post completing the registration process the certificate of incorporation is directly provided to the applicant through the ASIC. This serves as legal proof that the company has been incorporated with full force and effect as of the date of issuance.
Eligibility Criteria for Incorporating a Company in Australia
Director and shareholder eligibility requirements
To register a corporation in Australia, an applicant must have a minimum number of shareholders and directors. The demands of the particular kind of entity would determine this. Some of the businesses have three directors. Some organisations should have a minimum of one stakeholder.
Residency requirements
If the business is proprietary, at least one of the directors must typically reside in Australia. As per the rules and regulations incorporating a public company demands three directors out of which two directors should be Australian citizens. Additionally, the company secretary has to reside in Australia.
Age requirements
The Australian company's directors, owners, and top management executives must all be older than 18. The owners must get written authorisation before operating the business in Australia.
FIRB acceptance
Under Australia's foreign investment regulations, FIRB permission is required if shares are purchased by a non-Australian.
Post-compliance Procedures for Australian Company Registration
The following are the post-compliance criteria for company registration in Australia:
- Within 18 months of the company's incorporation and 5 months after the conclusion of its fiscal year, a shareholder's meeting must be conducted
- A 75% vote is needed for resolutions related to specific issues
- Every year, the Board of Directors must convene
- Every year, federal tax returns must be filed
- The amount of corporate tax would be 25% to 30%
- The ASIC must receive all balance sheets, annual reports, and financial statements
- These documents must be filed at intervals no greater than 15 months.
All documentation that must be presented for a branch office or representative office according to the nation of origin must be submitted.
Why Vakilsearch
Vakilsearch has the best team of business experts who can provide complete in depth details regarding incorporation of business. Our experts help multiple companies to get started and function effectively complying to all the rules and regulations. On request you can have consultation with our in house company secretary and in house chartered accountants to resolve all your queries. Our expert team will complete all your documentation process and incorporate your company in Australia without any hassle.
