There is a great deal to think about when starting a new business, from product development to marketing and from IT issues to finance. The distractions and demands are numerous. But if you get the set-up of the business right, meaning the basic registrations and systems are in place, then you are preparing for success in a business environment that naturally encourages performance.
These days there are more resources than ever to help make this happen, particularly at business.gov.au. We'll highlight others in our checklist, below.
Below 8 steps covers all requirements involved in starting a company
Step 1: Is a company right for you?
You need to decide if a company suits your needs or if you should use a different business structure. We can't offer specific advice about your situation, so we recommend seeing a financial professional.
A company is its own legal entity and lets you conduct business throughout Australia. You can also make use of other privileges, such as corporate tax rates or limited liability.
Registering a company is different to registering a business name.
You can also register different types of companies, including:
- not for profit or charitable organisations
- registrable Australian bodies, or
- special purpose companies.
Step 2: Choosing a company name
There are a few things you should consider when choosing a company name.
A company's name cannot be identical to an existing name
You can only use a name that is not identical to an existing company or business name. Use check name availability search to see if the name you want is available.
If you are the holder of an identical name, you may be able to register the name for the company in some cases:
|Where the business name holder is...||the name is only available to the proposed company if...|
|an individual||that individual is a proposed company director or member|
|a company||that same company is a proposed member|
|a partnership or joint venture||each of the partners is a proposed company director or member|
|a trust||each of the trustees is a proposed company director or member, and you have provided ASIC with a copy of the trust deed|
Before May 2012, it was possible for multiple businesses with the same name to exist as long as they were registered in different states and territories. This is no longer possible under ASIC's national register. You won't be able to register a company name if an identical name already exists.
You can only use certain characters in a company's name
The following characters are accepted:
Some terms are restricted
Some words and phrases cannot be used without the approval of a government minister. Some examples include:
You can't use words that could mislead people about a company's activities. This includes associations with Australian government, the Royal Family, or any ex-servicemen's organisations.
We may also refuse a name if it's considered offensive or suggests illegal activity. See company name availability to learn more about company names and restricted words.
Reserving a company name
If you aren't ready to register your company but want to make sure a name is available, you can apply to reserve it (Form 410).
If we approve your application, we will reserve the name for two months. If you wish to extend this period, you'll need to apply to reserve the name again.
We will not reserve a name for a long period as this prevents other people from using the name to conduct business.
Check existing trademarks or names
Even if we reserve or register a name for you, a company with a similar trademark or name may take action against you. It is your responsibility to be aware of any similar names or trademarks that may affect your name. Visit the IP Australia website to search for existing trademarks.
A company's name must show its legal status
A company must show the liability of its members and status in its name. For example:
- if a company's members' liability is limited to the amount unpaid on their shares, the name must end with 'Proprietary Limited'
- if the members' liability is unlimited, the company name must end with 'Proprietary'.
Below is a list of approved abbreviations that can be used in a company's name:
|Australian Business Number||ABN|
|Australian Company Number||ACN|
To display a different name, you can register it as a business name. For example, Apples Pty Ltd. can register 'The Apple Fruit Store' as a business name. This means it can trade as 'The Apple Fruit Store' and display it on all its signage.
Step 3: How will your company operate?
Before registering, you will need to 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 are in the Corporations Act and are a basic set of rules for managing your company. If a company doesn't want to have a constitution, they can use the replaceable rules instead.
Using replaceable rules means your company does not need a written constitution. This means you don't have the expense of keeping it updated as the law changes.
A company can also have a written constitution instead of using replaceable rules. Companies must keep a copy of their constitution with their company's records. See constitution and replaceable rules for more information.
Special rules for sole director/member proprietary companies
If a proprietary company has just one officeholder, they don't need to follow replaceable rules or have a constitution. If another director/member is appointed, then replaceable rules automatically apply to the company. This can be changed to a constitution at a later date.
A proprietary company must have no more than 50 non-employee shareholders and be either:
- limited by shares, or
- be an unlimited company that has share capital.
A proprietary company must not conduct any activity that requires disclosure to investors. They may only offer shares to members of the company or employees/subsidiaries of the company.
Step 4: Understand your obligations as an officeholder
If you're an officeholder of a company, you must follow the requirements in the Corporations Act. This includes meeting your legal obligations , which includes:
- ensuring company details are kept up to date
- maintaining company records and details on the register
- paying the appropriate lodgement fees and annual review fees as required.
Officeholders are ultimately responsible for a company's adherence to the Corporations Act.
See your company and the law for more information.
Step 5: Get consent from officeholders, members and occupiers
You must get written consent from the people that will fill these roles:
- Director (must be over 18)
- Secretary (must be over 18)
- Member (every company must have at least one member).
At least one director or secretary must ordinarily reside in Australia.
Get the consent of the owner of your registered office address
If your registered office does not belong to the company (e.g. it's your accountant's office), you must get their written permission to use the address.
You don't have to send copies of your written consent to us, but you do need to keep these with your records. You must also set up a register to record details of the members of your company.
Step 6: Registering your company
You can register a company in two ways:
Contact a private service provider
There are a number of private service providers (PSPs) that use software that has direct access to ASIC's systems. These PSPs can manage your company application for a fee. We don't endorse any particular PSP and we can't help with any issues that may arise, so make sure you do your own research.
Lodge a paper form directly with ASIC
You can register your company directly with ASIC by completing Form 201 – Application for registration as an Australian company and mailing it to:
Australian Securities and Investments Commission
PO Box 4000
Gippsland Mail Centre VIC 3841
You must complete all information on the form and sign it. Include the fee (use a cheque or money order) when posting your application.
Once we've processed your application, we will:
- give the company an ACN (which you can use to apply for an ABN)
- register the company, and
- send you a certificate of registration.
We'll also send you a corporate key, which is a unique number for your company. You will need your corporate key to create an account online and update your details.
Step 7: After your company is registered...
After your company is registered, make sure:
- the company's name is on display wherever the company conducts business and is open to the public
- the company's ACN/ABN is displayed on any documents the company publishes
- the company's details are kept up to date
Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice. Omission of any matter on this information sheet will not relieve a company or its officers from any penalty incurred by failing to comply with the statutory obligations of the Corporations Act.
You should also note that because this information sheet avoids legal language wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases your particular circumstances must be taken into account when determining how the law applies to you.