Thinking of starting a business in Australia? The Australian government highly values foreign direct investments and has provided foreign investors with a business-friendly environment in Australia. The nation lays out numerous attractive benefits to facilitate and ease the integration of international business owners into the country’s economy. Prior to starting a business in Australia, it is imperative to have a good grasp on the procedures to Australia company registration. Therefore, whether you are an aspiring entrepreneur or an experienced business owner, here is how to start a company in Australia 2021 with 10 steps.
1. Choose a business structure
Australia offers different types of business entities for you to choose from, where each business entity caters to different types of business activities. Foreigners who wish to register business in Australia can choose between these 5 business entities, which includes:
- Proprietary Limited Company
- General Partnership (GP)
- Limited Partnership (LP)
- Incorporated Limited Partnership (ILP)
- Representative Office
Before you register a business in Australia, it is crucial to fully understand your business model before choosing the most suitable business entity. Some considerations you should take into account include the type of business activity, tax obligations as well as potential personal liability.
2. Pick a company or business name
Before you register company in Australia, you are required to do a company name reservation in Australia. You will need an original company name that will differentiate you from your competitors. If you do not use a company name, the company’s Australian Company Number (ACN) can be used as the company’s name.
Moreover, the company name has to show the company’s legal status. In Australia, the most common business structure is Proprietary Limited Company or Pty Ltd company.
Before you apply to reserve a company name, you have to check the availability of the name as you cannot choose a company name already registered to another company. You can check if the proposed company name is available on Australian Securities and Investments Commission (ASIC)’s check name availability search.
3. Decide on company governance
Prior to Australia company registration, you must decide how your company will be governed. Your company can be governed by replaceable rules, its own constitution, or a combination of both.
Replaceable rules from the Corporations Act are a basic set of rules for the management of your company. The company can use the replaceable rules instead if they do not wish to have a constitution. Moreover, the company does not need to follow replaceable rules or have a constitution if a proprietary company has only 1 officeholder.
4. Choose company officeholders
You will have to decide who will be the shareholders, who are referred to as members of the company. Your company will also need a director and a shareholder, who are officeholders of the company. Officeholders are responsible for ensuring the company adheres to the Corporations Act, which includes ensuring company details are kept up to date, and maintaining company records and details on the register.
The company will require at least 1 director to be an ordinary resident in Australia and each director has to be aged 18 and above. Moreover, you will have to get written consent from every person who has agreed to be a director, secretary and shareholder. This will have to be kept as part of the company’s records once the company is registered.
5. Choose your share structure
After you have chosen your shareholders, you will have to decide the number of shares they own and the class of shares they will be issued. The most common shares are ordinary shares.
A proprietary company cannot have more than 50 non-employee shareholders and is either limited by shares or an unlimited company that has share capital.
A proprietary company is not allowed to conduct any activity which requires disclosure to investors. They may only offer shares to members of the company or employees/subsidiaries of the company.
6. Decide on state/territory of registration
A company can be registered in any state or territory of Australia. You are required to nominate a state/territory of registration when you submit your application to incorporate your company.
7. Have a registered address in Australia
You are required to have a registered office address in Australia as the registered office and principal place of business. If your registered office does not belong to the company, you will have to obtain the occupier’s permission to use the address.
8. Register your business
You can register your business with Australian Securities and Investments Commission (ASIC) on their website.
After the registration of your business is completed, your company will receive an Australian Company Number (ACN), which is a 9-digit number issued by the ASIC. All registered businesses in Australia are required to have an Australian Business Number (ABN). You can submit an application to the Australia Taxation Office (ATO) to receive your ABN, which is a unique 11-digit number. Your company will require an ABN to register for goods and services tax (GST).
All LLCs are required to file annual company tax returns with the ATO. In addition, it is mandatory to register for GST if the company’s turnover exceeds $75,000.
9. Register a business name
After registering for ABN, you can register your business name with ASIC. When registering for a business name, you will require an ABN, an address for service of documents, a principal place of business and an email address.
10. Apply for any licences or permits
Depending on your business activity, you will also have to register for relevant licenses and permits in order to legally operate a business in Australia. You may check the Australian Business Licence and Information Service (ABLIS) to determine what your business requires to kickstart.
11. Open corporate bank account
After the incorporation of your Australian company, your company is required to open a corporate bank account. Some of the Australian banks you can open a corporate bank account with include Commonwealth Bank of Australia, ANZ and Westpac. In most cases, Australian banks will not require you to travel to Australia for the bank meeting.