How to Register a Company in Australia (ASIC Guide + Legal Requirements)

Registering a company in Australia is an exciting step in establishing your venture on a firm legal foundation. From understanding the types of companies you can create to navigating legal requirements and gathering the necessary documents, the process can seem daunting; however.

That's why we've put together our legal guide to registering a company in Australia, to provide a step-by-step approach to company registration. We'll discuss: 

• What types of companies can be registered in Australia?
• What is ASIC, and how is it involved in company registration in Australia?
• What are the legal requirements for registering a company in Australia?
• What documents are needed to register a company in Australia?
• What are the steps to register a company in Australia?
• What are the benefits of registering a company in Australia?
• Can a foreigner register a company in Australia?

Without further ado...

What types of companies can be registered in Australia?

Before registering your business, you'll need to choose the right structure. Let's look at your options and their differences. 

Proprietary Limited Companies (Pty Ltd)

Often the go-to choice for small to medium-sized businesses, a proprietary limited company limits the liability of its shareholders to any unpaid amount on their shares. This structure is best suited for businesses looking for a straightforward management structure while limiting individual liability. However, it is important to note that the maximum number of shareholders is capped at 50 non-employee shareholders. 

Public Companies Limited by Shares

Public companies can be either listed or unlisted on the Australian Stock Exchange (ASX).

As a private company grows, it may eventually exceed the cap of 50 non-employee shareholders. At that point, it is legally required to convert into a public company. While a business can choose to register as a public company from the outset, doing so brings significant disclosure, reporting and governance obligations. For this reason, most medium-sized businesses prefer to remain a proprietary limited (Pty Ltd) company for as long as possible.

Public Companies Limited by Guarantee (CLG)

Typically used by non-profit organisations or charities, this structure allows for the liability of its members to be limited to the amount they have agreed to contribute if the company is wound up. It's a suitable option if your organisation focuses on social enterprises or community-focused activities. 

Incorporated Association & Registrable Australian Bodies

As an alternative to CLGs, smaller community groups, clubs, or charities often start life as an incorporated association, which is a simple and low-cost structure created under state or territory law. The catch is that this type of entity is only recognised in the state where it was formed. 

If there’s a desire to expand across state borders, you need to apply to ASIC to become a registrable Australian body. This registration gives you an Australian Registered Body Number (ARBN) and allows you to operate nationally, much like a company does, while still keeping its original association structure. 

Special Purpose Companies

Consider this entity if your company's objectives are specific, such as a home unit company or a joint venture company. It provides a platform for a focused operational plan while complying with specific regulatory requirements. 

Before you register as a company, consider the nature of your business, your long-term goals, and the legal obligations of each company structure. This will allow you to make a decision that best fits you, your business vision, and your strategy.

What is ASIC, and how is it involved in company registration in Australia?

ASIC, or the Australian Securities and Investments Commission, plays an important part in the Australian company registration process. It is the national regulator responsible for the oversight of companies, financial markets, and financial services. By law, all companies operating in Australia must register with ASIC.

When you register a company in Australia, ASIC is involved at several points.

Firstly, it maintains the register of companies, meaning all new company names must be checked for availability through its database to avoid duplication and legal issues. This ensures your chosen company name does not conflict with existing registered entities. 

However, ASIC's responsibilities extend beyond the initial registration. It is also involved in the ongoing review of companies to ensure your business operations remain above board. There are certain corporate actions that ASIC needs to be notified of within certain timelines, such as changes to the member register or the details of the board.

With this in mind, it's important to keep the right records and promptly notify ASIC of changes to your corporate structure. 

Looking to register a company in Australia? You'll need to engage with ASIC throughout the lifecycle of your business, from the initial registration to frequent notifications as the business grows. 

What are the legal requirements for registering a company in Australia?

Below are essential company registration steps to keep in mind: 

• Select a Company Name: Your company's name must be unique and not identical to an existing name. It's key to choose a name that isn't trademarked or restricted. Consider checking this through the ASIC website. 
• Choose Company Type: Select the most appropriate structure for your company, such as those listed above.
• Draft Company Constitution: Although not mandatory, having a company constitution can simplify your management structure. Without a constitution, your company will be governed by the rules provided under the Corporations Act. 
• Appoint Company Officers: You'll need to have at least one director who usually resides in Australia. If it's a public company, a company secretary who resides in Australia must also be appointed. 
• Determine Licenses and Permits: You might require specific licenses or permits depending on the industry and location. Make sure to research applicable requirements thoroughly. 
• Apply for an Australian Business Number (ABN): An ABN is necessary for tax and regulatory purposes. It uniquely identifies your business in Australia. 

What documents are needed to register a company in Australia?

To successfully register your company in Australia, you'll need to have the right documents in place. Here's an overview of what you'll need: 

• Registered Office Address: A physical address in Australia where communications may be sent is required. This address will be visible to the public.
• Directors’ and Secretaries’ Consent: Each director and secretary must consent to their role and confirm their duties. Ensure they meet the age and residency criteria.
• Shareholders' Details: Provide the names and addresses of shareholders and details about the shares issued.
• Identification Documents: Identification for directors, secretaries, and shareholders may be necessary to establish their identity and confirm eligibility.

Gathering these documents ahead of time will streamline the registration process with the Australian Securities and Investments Commission (ASIC). 

What are the steps to register a company in Australia?

1. Choose a Company Name
2. Select a Company Type
3. Register with ASIC: Once you've decided on a name and company type, register your company via the Australian Government's Business Registration Service (BRS) or directly through ASIC. You'll receive an Australian Company Number (ACN) upon successful registration.
4. Apply for an ABN (if needed)
5. Set Up a Business Bank Account: Open a separate bank account for your company to help manage finances and maintain transparency and compliance.
6. Understand Your Tax Obligations: After registering, familiarise yourself with your tax responsibilities, which may include registering for Goods and Services Tax (GST), applying for a company Tax File Number (TFN), registering for pay-as-you-go withholding (PAYG) and other obligations. You might need to register for GST if your annual turnover is $75,000 or more.
7. Keep Records: Ensure you maintain accurate records of your company’s activities, financials, and meetings. Good record-keeping helps greatly in compliance and decision-making.
8. Stay Compliant: Regularly update ASIC with any changes to your company’s details, such as address or board members, to remain compliant with regulations.

Conclusion

Starting a company in Australia? Congratulations! Before you get up and running, consider working with expert corporate lawyers who've been through the process, time and time again.

Get in touch today to see how our Australian team can support you.