There are generally two steps to register a company in Australia, registering with ASIC and registering with ABR. This article mainly explains the relevant matters that need to be understood when establishing a company under the framework of ASIC compliance and ATO tax registration compliance. As an entrepreneur, how to register a company to establish your own business, as well as the time required to register a company, the materials that will be obtained after successful registration, the regulatory requirements for company operations, and how accountants can help entrepreneurs simplify the process, so as to help entrepreneurs make a reasonable and legal decision.
Step 1: ASIC Registration
ASIC, the Australian Securities & Investments Commission, is a government agency overseeing companies, markets, financial services, and consumer credit in Australia. It administers Australian Company Numbers (ACNs), often the first step in company registration.
This chapter guides you through obtaining an ACN and covers assessing company alignment, choosing a name, establishing governance, understanding officer responsibilities, and completing registrations. The process starts with verifying shareholder and officeholder identities and authorizations.
1. Is the company a good fit for your needs?
Before proceeding, assess whether a company structure meets your needs or if an alternative business structure would be better suited. A company functions as a separate legal entity authorized to operate in Australia, providing a fixed corporate tax rate and limited liability, appealing to many Australian entrepreneurs. Differentiate between the registered company name and the registered business name (Business Name). Alternative corporate structures to consider include:
- Non-profit or charitable organizations.
- Entities eligible for registration in Australia.
- Specialized types of companies.
2. Decide and register a company
When choosing a company name, consider the following factors:
a. The company name cannot be the same as an existing company name
Before May 2012, it was possible for companies with the same name to exist in different states and territories. However, since then, according to ASIC’s requirements, if the same name already exists, the company name cannot be registered.
Before we help you register, we usually recommend that you provide 3-4 company names you want to register. The colleagues in charge of corporate administration will screen the company names in the order of the names provided by the customer to see if they are available. You can also check whether the company name you want is available by yourself.
b. There are restrictions on the use of special characters in company names
The following table lists the special characters that can be used in names:
| Characters | Characters | Characters | Characters |
| {} | $ | space | : |
| () | % | . | ; |
| | | * | , | ” “ |
| @ | & | ? | ‘ |
| # | = | ! | / |
| \ | _ |
c. Some special words cannot be used to register a company
Examples of such words include “Bank,” “Trust,” “Royal,” and “Incorporated.” However, common abbreviations are allowed in company names, such as “No” for “number,” “CO” for “Company,” and “Aust” for “Australian.” It’s important to note that ASIC reserves the authority to reject registration if a proposed company name is considered offensive to others or suggests involvement in illegal activities.
d. Abbreviations that can be used in company names
There are some common abbreviations that can be used in company names, such as the abbreviation No for number, Company can be abbreviated as CO in company names, and Australian can be abbreviated as Aust.
The following table shows abbreviations that can be used in company names:
| and | & |
| Australian Business Number | ABN |
| Company | Co Coy |
| No Liability | NL |
| Australian | Aust |
| Australian Company Number | ACN |
| Limited | Ltd |
| Number | No |
| Proprietary | Pty |
e. You can reserve your company name in advance名
If you’re not ready to register your company, we can help reserve your preferred company name in advance to prevent others from registering it. Name reservations are usually valid for two months and require renewal by submitting the form again upon expiration. ASIC typically doesn’t accept long-term reservations for company names.
f. Check for existing Trade Marks or names名称
Even if ASIC reserves or registers a name for you, companies with similar trademarks or names may take action against you. You can search for existing trademarks on the IP Australia website to find potential similar names.
3. Decide what rules the company will operate by
Before proceeding with registration, it’s essential to determine how your company will be managed. Typically, company operations adhere to one of the following four rules:
Replaceable Rules
Corporations Act 2001 provides for a set of replaceable basic operating rules, called Replaceable Rules, which can be used to govern the operation of a company in the absence of a company constitution.
Company Constitution
Most companies choose to develop their own constitution or use a widely used company constitution template to manage their operations.
Special rules for sole director/member proprietary companies
Special rules for sole director/member proprietary companies require these individuals to bear sole responsibility for the management of the company and may be required to submit regular reports to relevant authorities. They need to maintain independence and ensure that the company’s information disclosure is complete and compliant.
Ownership Structure
A limited company must have no more than 50 non-employee shareholders:
- Limited by shares, or
- Unlimited company with share capital.
4. Understand your obligations as an officeholder
As an officeholder, you must fulfill your rights and obligations in accordance with the requirements of the Federal Law Corporations Act 2001. The most common roles held by officeholders are typically two, and they can be filled by the same person:
- Director
- Company Secretary
If you serve on a company’s board, you must adhere to the provisions outlined in the Companies Act. This entails meeting various legal obligations, including:
- Ensure that company information is updated promptly;
- Maintain accurate company records and registration information;
- Pay applicable application fees and annual fees;
- The designated individual responsible for the company bears ultimate responsibility for ensuring compliance with the Companies Act.
From April 5, 2022, it’s required to obtain a director number before assuming the role of a director. Application procedures are categorized into domestic and overseas applications. For detailed information on application methods and requirements, please refer to our article: Have You Obtained Your Director ID?- mnygroup.com.au
Registration must have the written consent of the person holding these roles:
- Company director (must be over 18 years old)
- Secretary (must be over 18 years old)
- Shareholder, at least 1 person.
At least one director and company secretary must ordinarily reside in Australia.
A public company must have at least two directors ordinarily resident in Australia.
Confirm your registered address:
- Registered Office: This address primarily serves to receive official correspondence from ASIC. It may differ from the company’s business address and cannot be a PO Box. If an accounting firm acts as the ASIC agent, its address can serve as the registered office.
- Principal Place of Business: This address denotes the physical location where the business operates. It holds significant importance, especially for government subsidies announced during the epidemic, as they often require a business address based on the registration details submitted to ASIC.
6. Authorization to start registration
After confirming all the information and your needs, we will start registration according to your arrangements.
Step 2: ABR Registration
The second step in registering a company in Australia is to apply to the ABR for registration of ABN and the company’s TFN.
The ABR, or Australian Business Register, issues Australian Business Numbers (ABNs) and manages related information. The ABN Lookup website, commonly used, is administered by the ABR. Once you’ve obtained the ACN, you can apply to the ABR for an ABN.
To streamline the registration process, the ABR typically facilitates the registration of the TFN (Company Tax Number), GST, and PAYG W with the Australian Taxation Office (ATO) on behalf of the company. Additionally, the ABR offers services for registering Business Names.
Materials required for company registration
In summary, to register a company in Australia, we need the following materials:
- Company name
- Company address
- Company officeholder information
- Company shareholder information
- Company’s main business, contact number and email
- Company Director’s personal information
- Company Secretary’s personal information
Time required to set up a company
It usually takes only 1-3 working days to register a new company. If the company name is unique or the information of the company directors is inaccurate, the registration time may be longer.
Materials you will receive after successful registration
After successful registration, the company will obtain a company registration certificate, a company registration information form, company articles of association and an ASIC information form.
Certificate of Registration
After successful registration, the company will receive a company registration certificate. The company does not need to display the registration certificate, but if there is a registered business name (Business Name), it must be displayed in all locations and documents.
Company register documents
The company’s registration information sheet contains vital details such as officeholder information, shares held, class of shares, Share Certificate, Minutes Book (meeting minutes), and any other relevant information pertaining to the company’s registration and governance.
Company constitution
All companies are required to operate in accordance with regulations. The Corporations Act 2001 offers a set of basic operating rules known as Replaceable Rules, which can govern a company’s operations in the absence of specific articles of association. However, most companies prefer to formulate their own articles of association or utilize widely used templates for management and operational purposes.
ASIC information form（Client copy ASIC form）
The form will meticulously document the information provided during the application process, encompassing details such as the registration location, company particulars, existence of a parent company, identification of officeholders, equity structure, and additional member information.
Regulatory requirements for company operations
During operation, companies are subject to oversight not only from the ATO for tax-related matters but also from ASIC. ASIC typically requires companies to submit an Annual Statement, report any changes related to company registration promptly (usually within 28 days), and provide information such as solvency resolutions (solvency agreement/statement).
It’s important to note that different industries are governed by specific regulations. After successfully registering a company, it’s necessary to obtain the appropriate licenses and certifications before commencing operations. For instance, selling alcohol requires a liquor license, the catering industry requires a food safety certificate, playing music in public places requires authorization, and hiring employees necessitates WorkCover compliance. For further information on relevant compliance requirements, the Australian Business License and Information Inquiry Service can be consulted.
What are the advantages of registering a company in Australia?
When registering a company in Australia, you will enjoy the following benefits:
- Legal entity: A company is a legally independent entity with its own rights and responsibilities, separate from its owners.
- Limited liability: Shareholders’ liability is usually limited to the value of their shares, and personal assets are not affected.
- Business reputation: Registering a company helps to enhance your business reputation and makes it easier to work with potential customers, suppliers and partners.
- Tax benefits: A company may enjoy tax benefits, such as low tax rates or specific tax exemptions.
- Permanence: The existence of a company is not affected by changes in shareholders or owners, and has a long life cycle. Financing convenience: A registered company can more easily obtain financing from banks, investors or partners.
- Employee incentives: The company structure helps to implement incentives such as employee stock option plans to attract and retain talent.
- Professional image: Registering a company helps to establish a professional image and enhance its attractiveness to customers, suppliers and employees.
Tax types and structures involved in setting up a company in Australia
There are many tax types and structures involved in setting up a company in Australia. The types of taxes that a company may need to consider include corporate income tax, goods and services tax (GST), employer obligations (such as payroll and wage taxes when paying employees), capital gains tax, etc. The tax structure can vary depending on the type of company and business activities, including sole proprietorships, partnerships, or registered companies. In terms of tax invoices, a company may need to issue the following types of invoices:
- Goods and Services Tax (GST) invoices: Applicable when goods are sold or services are provided to customers and GST is charged.
- Deduction invoices: Allow companies to claim GST deductions for goods or services purchased from other companies for company operations.
- Salary invoices: Used to record salaries and wages paid to employees and deduct applicable taxes.
- Other tax invoices: May include other expenses related to company operations, such as rent, utilities, etc.
How can accountants help entrepreneurs register a company?
- If you’re uncertain whether your company’s business model requires GST registration or if GST will impact your cash flow stability, it’s crucial to analyze your needs and assess the necessity of company registration.
- Our firm can assist in recommending the most suitable tax structure based on your circumstances.
- We provide comprehensive guidance on the roles within your company, their decision-making rights, and obligations.
- Additionally, we explain the varying tax characteristics across industries and the associated tax costs under different business models.
- Our goal is to analyze your company’s income, tax costs for directors and shareholders, and optimize profit distribution to minimize tax burdens.
- As professional accountants, we offer forward-looking tax advice by leveraging our expertise and practical experience.
- We recommend appropriate entrepreneurial structures, such as family trusts, tailored to your specific needs.
If you are preparing to register a company but feel you don’t know where to start, you can make an appointment for a free consultation with MNY Group Accounting Firm.
本文所涉及的相关资料
ASIC (Australian Securities & Investments Commission)
Leo Wang is a client Services Manager, working closely with clients to meet their needs, offering strong accounting and tax support with a solution-focused approach.
