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How do I set up a company?

To set up a private, or proprietary, company you will need to do the following:

1) Choose a company name
2) Appoint directors and the secretary
3) Appoint shareholders
4) Determine the registered office
5) Determine the principal place of business
6) Apply to register the company
7) Apply for a tax file number
8) Apply for an Australian Business Number
9) Register for GST
10) Open a bank account

The company structure can be advantageous for some organisations. Before setting up a company you need to be aware of the associated legal and financial implications.

1) Choose a company name

The Australian Securities and Investments Commission have a free search facility, the National Names Index, which allows you to check if your proposed company name is available. Once the company name is registered, your company will have exclusive rights to that name throughout Australia. If your company owns or runs a business with a name different to that of the company name, the business name will need to be registered with the Department of Fair Trading in the particular state or territory in which it operates.

The Australian Company Number can be used as the company name if you would prefer not to have a name or have difficulty choosing a name. The Australian Company Number is a unique nine-digit number identifying your company when transacting business. It must be displayed on your company’s invoice as well as on other legal documents unless the company’s Australian Business Number is displayed.

2) Appoint directors and the secretary

A proprietary company must have at least one director, but need not have a secretary. All directors and the secretary must be at least 18 years old. At least one director must reside in Australia. A director can also be the secretary.

You must obtain written consent from the appointed directors and the secretary. The consent forms must be drafted and signed by the relevant people before applying to ASIC for registration. The signed documents of consent are to be stored with the company’s records and not sent to ASIC.

3) Appoint shareholders

A proprietary company must have at least one shareholder. Each shareholder must be at least 18 years of age. At least one shareholder must reside in Australia. A proprietary company can have up to 50 non-employee shareholders.

Written consent must be provided by each shareholder before applying for the company. Once incorporated as a company, each shareholder will need to be issued with a share certificate which details the shareholder’s name and address, their number of allotted shares, the share class, the amount paid per share and the amount unpaid per share.  

4) Determine the registered office

The registered office is the official address of the company and the address to which ASIC will send letters, reminders and other documents. Whenever correspondence is sent to this address it must be responded to promptly. Your registered office can also be the office of your accounting firm, solicitor or lawyer. If this is the case, you will need to obtain written consent to use their offices as your registered office and the consent should not be sent to ASIC but stored with your company’s records.

5) Determine the principal place of business

The principal place of business is the location at which business is carried on under the company or business name. A Post Office box is not acceptable as the ‘place of business’ must be a physical address.

6) Apply to register the company

To register a new Australian company you will need to apply to the Australian Securities and Investments Commission (ASIC) by completing Form 201 which can be located online at www.asic.gov.au

Before completing Form 201 you will need to gather specific information and details:

1) A nominated person who ASIC can contact if there is a query about the Form 201
2) The state or territory in which the company will be registered
3) The proposed company name (which can be it’s Australian Company Number)
4) Whether the proposed company name is identical to a registered business name
5) The type of company
6) Whether the company will rely entirely on replaceable rules or adopt its own constitution
7) The company’s registered office address
8) The principal place of business in Australia
9) Whether the company will have an ultimate holding company upon registration
10) Details of the directors and secretary including their name, address, date of birth, and place of birth
11) Details of shares issued by the company. The standard share codes are listed in the Form 201.
12) Details of the shareholders including their names and addresses.

Upon registration you will receive an Australian Company Number and Certificate of Registration. The company name, Australian Company Number, company-type and date of registration are printed on the Certificate of Registration.

7) Apply for a tax file number

The tax file number is the unique number that will identify your company at the Australian Taxation Office. The company will need a tax file number to lodge a tax return.

To apply for a tax file number, download the application form at the Australian Taxation Office website (www.ato.gov.au) or apply via the Australian Business Register website (www.abr.business.gov.au). At the Australian Business Register website you can apply for a tax file number and an ABN in one application form.

8) Apply for an Australian Business Number

Apply via the Australian Business Register website to register an Australian Business Number (ABN). Alternatively, download the application form from the Australian Taxation Office website. The application form can be time consuming if you don’t have the required information on hand. You should receive the Australian Business Number within seven days and you will be notified in writing by the Tax Office.

Not all companies need an ABN. Decide if your company needs to apply for an ABN. It is not compulsory for your company to have an ABN, however, it is the identifying number businesses use when dealing with your business. Your company can trade without an ABN, however, if the ABN is not displayed on the company’s invoice, customers and clients are required to withhold payments.

The company will need an ABN to register for GST.  

9) Register for GST

Register your company for GST (Goods and Services Tax) at the same time as applying for an Australian Business Number or tax file number via the Australian Business Register website.

The Australian Taxation Office has an application form on its website for GST registration.

Decide if your company needs to register for GST. It is compulsory to register for goods and services tax if your company is carrying on a business and its annual turnover is more than $75,000. Many businesses voluntarily register for GST upon registration.

Once your company registers for GST the Australian Taxation Office will issue business activity statements. Goods and services tax is reported and remitted to the Tax Office in the business activity statement.

10) Open a bank account

You will need the Certificate of Registration and each signatory needs to satisfy a 100 point identification check. Supply the bank with your company’s tax file number otherwise the bank will withhold payments to which your company is entitled.

 

 

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