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How to register a company Australia
How to register a company Australia
Australia, also known as the Land Down Under is popularly referred to as the largest island and smallest continent in the world. In actual fact, it’s more of a continent due to certain conditions that it meets. The country is officially known as the Commonwealth of Australia and has a population of 24.6 million (2017 estimate). Let discuss in detail about how to register a company Australia as foreign investor?
The country’s economy relies on various sources such as mining, manufacturing, tourism, education, financial services and agriculture. The Australian currency is the Australian Dollar (AUD).
Types of companies in Australia
There are many types of business structures to choose from when deciding to incorporate a company. Below are some of the types that are available.
- Sole trader – This type is where the business in owned and managed by a single person. The person is responsible for the debts and losses of the company.
- Partnership – This structure is a business formed and managed by a minimum of 2 persons. The maximum number of partners allowable is 20. The partnership is governed by the relevant law according to the state that it’s incorporated in.
- Company – A company is a separate legal entity compared to the sole trader and the partnership. The company has to be registered with the Australian Securities & Investment Commission (ASIC). There are basically 2 classifications of companies –
- a) Company limited by shares – This form of company limits the liability of the shareholders to the value of their shares in the company. This company can either be a private company or a public company.
For a private company, the shares of the company are not freely transferable while for a public company the shares can be traded and transferred without restriction.
- b) Company limited by guarantee – This type of company is mainly used for non- trading organizations.
- Trust companies – A trust is an obligation imposed on a person, known as a trustee to hold properties or assets for the benefit of others (also known as beneficiaries). It must have a formal trust deed that outlines how the trust operates.
- Foreign company – This is a company that is incorporated outside of Australia.
How to register a limited liability company in Australia
The Ease of Doing Business report ranks Australia quite high at 15 out of 190 countries. The following is the process to register a limited liability company in Australia –
- Complete and lodge the application form – Before lodging the application, the company should come up with a company name and also check the availability of the name. Otherwise the company will just be referred to by its Australian Company Number (CAN).
The applicant will need to complete the application form from ASIC which is the Application for Registration as an Australian company and pay the fees of AUD457. This is how to register a company Australia as first step.
Any person who is appointed to be a director or become a shareholder of the company must have consented in writing to do so. At least one director or at least one company secretary must be a resident of Australia. The registered address of the company must also be an Australian address.
The company is allowed to adopt its own company constitution or rely on the Replaceable Rules in the Corporations Act 2001. The company will be issued a certificate of incorporation upon completion of this whole process which normally takes 1 day.
- Register for Australian Business Number (ABN) with the Australian Tax Office (ATO) – Easy way of how to register a company Australia as follows: This procedure which also takes 1 day is required under the Income Tax Assessment Act 1936 and the New Tax System (GST) Act of 1999.
If the company’s yearly turnover is AUD75, 000, it must register for the Goods & Service Tax (GST) by obtaining an 11 digit ABN. Those companies whose annual turnover which is lower than the threshold of AUD 75, 000 may also choose to register for GST. The going rate for GST in Australia is 10%.
This application can be done online or by a submission of hard copies to the ATO. For the online submission, you can get the ABN at the end of the process. As for the hard copy submission, the ATO will mail the ABN within 28 days.
The company must also deduct taxes from the employee’s salary under the Pay-As-You-Go scheme. The company must also provide a payment summary and subscribe to the employee superannuation. The company must then report and issue the payment to the ATO.
- Sign up for Worker Compensation Insurance – This is compulsory for all companies and must be done at an insurance agency. The premiums that the company needs to pay will depend on the nature of business of the company.
After you have established your company, you would need to ensure the following –
- The company’s name is displayed anywhere that it’s open for business and is open to the public.
- The company’s ACN or ABN is displayed on any documents that the company will use.
- The company’s details are kept up to date.