Company Registration in Australia in 2023-24
An Island continent country in the southern hemisphere that emerged as one of the wildlife attractions to the rest of the world. The country of Australia is home to a few endangered and rare species that could be only found on this tropical island. The capital city of Canberra though offers
opportunities and all the other 8 states play a vital role in the overall development of the country and have mainly survived on FDI due to underpopulation. Lately, the country has been diving in on economic opportunities and has also made adjustments in the sectors of finance, politics, and bureaucratic decision making which have eased it for foreign entrepreneurs to set up their businesses in Australia.
This article will describe briefly how an entrepreneur can do company registration in Australia.
Procedure for Australia Company Registration
Australia company registration typically involves the following steps:
Choose a firm name
Choose a distinct firm name and conduct a name search to guarantee it is accessible.
Appoint Director and Secretary of the firm
Appoint at least one director and one company secretary (if a proprietary company) or two directors (if a public company).
Submit the business registration form & pay the fees
Lodge the appropriate forms and pay the required fees to the Australian Securities and Investments Commission (ASIC).
Acquire the Australian Business Number
Acquire an Australian Business Number (ABN) and register for Goods and Services Tax (GST) if necessary.
Register for tax
Register for taxes, such as Pay As You Go (PAYG) withholding and Fringe Benefits Tax (FBT), if applicable.
Set up a registered office
Lastly, set up a registered office and a mailing address for the company.
Documents Required for Company Registration in Australia
The documents required for company registration in Australia vary depending on the type of company being registered and the state or territory in which it will be registered.
Generally, the additional documents that are expected for company registration in Australia include:
- ACN (Australian Company Number)
- Constitution or replaceable rules
- Details of directors and secretary
- Registered office address
- Shareholder details
- Any other relevant documentation as per the state or territory regulations.
Types of Business Entities for Company Registration in Australia
In Australia, there are various types of entities that can be established when you think to register a company in Australia including:
Proprietary Limited Company
The system that is nearest to that of a Limited Liability Company is the Proprietary Limited company (“Pty Ltd”). It’s the most popular corporate structure in Australia and is among the most suitable companies for foreign investors who want to conduct business in the country.
The incorporation of the Pty Ltd company requires at minimum one director who is resident (if you’re not a resident of Australia it is necessary to find a director or find an organization that provides nominee directors). Pty Ltd companies can be entirely owned by foreign investors and the capital for the first share is as low as $1.
Australian Public Companies (ASX)
The public companies of Australia tend to be founded by businessmen who wish to draw capital from a greater number of investors rather than Pty Ltd companies. The management team of these companies is usually independent of the business owners.
This type of entity follows the same incorporation procedure as the one for a Proprietary Limited Company, although you must have at least 3 directors (including two Australian resident directors) to be approved, along with a Company Secretary and Public officer to be tax-efficient.
The partnerships in Australia are used most often for providing accounting and legal services to clients. Partnerships may be established with general partners that are either liable for the activities of the partnership or only accountable for their own contributions towards the association.
If you want to establish a partnership in Australia it is necessary to have at minimum 1 Australian resident partner. While a partnership doesn’t have to pay tax on the profits it makes, each of its partners must declare their portion of the profits in addition to paying their personal tax.
Another common business structure for small-sized businesses in Australia is the Trust. Family-owned businesses usually utilize discretionary trusts. However, larger companies that have more than one person from the family member tend to utilize the unit (or fixed) trusts.
Trusts are not legal entities, and they do not charge tax on their own provided that all the trust’s earnings are given to its beneficiaries. The beneficiaries then become accountable for their own tax on the profits. Trusts are created by deeds and don’t have to be registered with authorities.
Australian Branch Office
To establish the Australian branch as part of an expansion strategy, foreign companies can sign up through ASIC along with The Australian Taxation Office. Branch offices are an option for companies who wish to establish a presence in Australia and would like to consolidate earnings from their home nation.
You’ll need to designate an agent in the local area who will accept notifications on behalf of your business and then create an address within the country. Branch offices are taxed in Australia for their Australian earnings and must annually submit financial reports to ASIC.
There’s also an Australian Representative Office and this type of business entity permits the conduct of only non-commercial and limited activities and is a popular option for companies looking to expand their reach internationally or conduct research and analysis prior to getting into the market.
It’s fairly simple and easy to establish a Representative Office, but it is more economical to establish the Branch or a different type of business to reduce time on the road.
Eligibility for Australia Company Registration
To be eligible for company registration in Australia, the company must:
- Director: The company must have a minimum of one director who is an Australian resident.
- Secretary: The firm must have at minimum one firm secretary who can be an Australian resident.
- Registered office: The firm should have a registered office in Australia.
- Business name: The firm should also possess a unique name that is not already registered and does not closely resemble an existing company name.
- Not be disqualified from registering as a company.
- Not have an identical name to an occurring firm.
- Obey any additional rules outlined in the Corporations Act of 2001
It’s also important to note that the firm should be enrolled with the Australian Securities and Investments Commission (ASIC).
Various Taxes on Australian Company Registration
When you think to register a company in Australia, there are several taxes that may apply, including:
- Income Tax: All firms are required to pay income tax on their earnings at the corporate tax rate, which is currently 30%, with the exception of “small or medium business” organisations, which are subjected to a lower tax rate of 25%.
- Goods and Services Tax (GST): Companies with a GST turnover of more than $75,000 are required to register for GST and are charged GST on their sales. GST is a tax that is imposed by the federal govt at a rate of 10% and the proceeds are given to the state govts.
- Payroll Tax: Companies with a payroll above a certain threshold (varies by state) are required to pay payroll tax on their employee’s salaries and wages.
- Fringe Benefits Tax (FBT): Employers may be required to pay FBT on certain non-cash benefits given to workers, such as firm cars or low-interest loans. The FBT is levid at 47%.
- Capital Gains Tax (CGT): Companies may be required to pay CGT on any capital gains made from the sale of assets.
It’s important to consult with a tax professional to understand the specific tax obligations of your company.
Cost to Register a Company in Australia
The cost to register a company in Australia can vary relying on the kind of firm and the services used to register it. The Australian Securities and Investments Commission (ASIC) charges a fee for registering a company, which is currently $487 for an online application or $582 for a paper application.
Additionally, there may be other costs required for Australia company registration, such as legal fees for drafting the constitution, or company name search fees if you use a professional service to register the company.
Why Register a Company in Australia?
There are several reasons why an entrepreneur might choose to register a company in Australia:
Setting up a company in Australia provides limited liability protection for the owners, meaning their personal assets are separate from the company’s assets.
Favorable business environment
The Australian government has a pro-business stance and has implemented policies to support the growth of companies, such as tax incentives and grants.
Australia has a relatively low corporate tax rate and a system of tax incentives and concessions for small businesses.
Access to funding
Companies registered in Australia have entry to a broad expanse of funding alternatives, including venture capital, angel investors, and government grants.
Access to markets
Australia is a major trading nation with strong ties to Asia, Europe, and North America, making it an attractive location for businesses looking to expand internationally.
Access to the skilled workforce
Australia has a highly educated and skilled workforce, making it an attractive location for businesses in industries such as technology and professional services.
Good quality of life
Australia is known for its high standard of living and quality of life, which can be a factor in attracting and retaining top talent.
Advantages of Australia Company Registration
There are several advantages to company registration in Australia, including:
- As a distinct formal entity, a firm offers its shareholders limited liability, meaning they are only accountable for the firm’s debts to the importance of their investment.
- Companies in Australia are eligible for a range of tax concessions, including a lower corporate tax rate and access to tax offsets.
- Having a registered company can enhance the credibility of a business, making it more attractive to customers, suppliers, and investors.
- Companies can be structured in a variety of ways, offering flexibility for different types of business models and ownership structures.
- Registered companies can access capital through equity and debt financing, which can be beneficial for growth and expansion.
- Shares of companies can be bought and sold more easily than ownership in other business structures, which makes transferring ownership of a business more efficient.
Australia is supposed to be one of the decent spots to do business globally. In the year 2020, Australia ranked 14th against more than 190 nations, according to the Doing Business Report that was conducted by the World Bank Group. However, there are a number of benefits for foreign companies looking for company registration in Australia, such as access to a large market, a well-developed infrastructure, and a skilled workforce.
It’s recommended to consult a professional from Odint Consultancy to guide you through the process of company registration in Australia.
A non-resident can establish a business in Australia but they can’t start it by themselves.
The most well-known type of business in Australia is one that is a private limited corporation (Pty Limited). The filing as a restricted business is that if the business is insolvent the shareholders’ sole liability is the value of their shares in the company.
The registration form for companies typically takes about 15 minutes to fill out. Once completed, the company is usually registered in a matter of 1-2 minutes. The only exception to this is the case where ASIC requires a manual review of the name of your business.
To qualify for an Australian business visa, you have to make your expression of Interest (EOI) through SkillSelect and be then invited to accept an application.
The cost for registering companies is between $443 to $538 according to the type of business that you want to register. Find the most current list of fees for companies on the external website on the ASIC website.
If you own your business in Australia, it is governed by Australia’s Australian Consumer Law (ACL). If you interact with clients, or companies that provide services or sell products it is important to know what laws impact your company.