Company Incorporation in Australia

Company Incorporation in Australia-Overview

Are you looking to expand your business or company globally? If yes, then you may consider registering your company in Australia. Australia plays a huge role in GDP production, with a massive output of 1.74 Trillion USD in 2023. It has a dynamic and welcoming business environment, offering a robust legal and regulatory framework and a stable economy.

Australia provides ideal conditions for foreign incorporations to grow. There are multiple reasons for a company's incorporation in Australia. Its cultural diversity provides access to a vast domestic market, a well-educated workforce, a lower GST rate, and various other advantages.

Australia provides ideal conditions for foreign incorporations to grow. There are multiple reasons for a company's incorporation in Australia. Its cultural diversity provides access to a vast domestic market, a well-educated workforce, a lower GST rate, and various other advantages.

Australia is a member of the RCEP (Regional Comprehensive Economic Partnership), the largest free trade agreement globally. According to the Ease of Doing Business Index, it is ranked 14th.

Further, Australia is one of the major trading nations with strong connections to Asia, Europe, and North America, making it an attractive location for businesses seeking company incorporation in Australia.

Benefits of Incorporating a Company in Australia

Company incorporation in Australia provides various benefits, which are why companies and businesses across the globe choose Australia for setting up a business.

1.Lower Tax Rates

Companies and businesses in Australia pay a lower tax rate than the highest tax rate imposed on an individual. This tax rate is calculated on the amount of revenue the business generates.

2.Transfer of Ownership

In Australia, the transfer of ownership is easy and simple. It can be done by buying and selling the company’s shares. However, company incorporation in Australia does not have multiple formalities, and further ownership can be transferred without hampering business operations.

3.Limited Liability Protection

Whenever a company incorporated in Australia has debts and obligations, the shareholders are shielded from personal liability. This feature thus provides an assurance that individual assets are protected and safeguarded, offering peace of mind along with financial security.

4.Access to Capital

It is easier for a company to attract investors and raise business funds. Company incorporation in Australia is nothing different. Once the company is incorporated, it can borrow money from various sources and incur debt.

However, investors often prefer to invest in a registered company rather than a sole trader or partnership due to the formal structure of accepting investments.

5.Skilled Workforce

Australia has a highly educated and skilled workforce thus attracting a huge number of companies and businesses across the globe for company incorporation in Australia.

6.Market Access

Australia is one of the leading trading nations with strong ties with Europe, Asia, and Europe, attracting business globally.

7.Anonymity

A company registered in Australia has a legal obligation not to expose or reveal information regarding its investors or owners. Hence, this provides privacy to business owners while running a company.

Who Governs the Company Incorporation in Australia?

The governing body of company incorporation in Australia is ASIC or the Australian Securities and Investments Commission. It is a regulatory authority that regulates laws, securities, and financial services in Australia. ASIC is responsible for maintaining the ABR (Australian Business Register), which contains information or data on all the companies registered in Australia, ensuring that companies in Australia align with the Corporations Act 2001 and other relevant laws and regulations.

Individuals and business entities must obtain registration from ASIC to operate a business in Australia. ASIC, as a regulatory authority, looks after compliances connected to corporate governance, financial reporting, disclosure requirements, and investor protection under various laws and regulations.

Types of Business Structure in Australia

Before applying for company incorporation in Australia, an applicant must know the types of business entities available in Australia. Given below are the most common types of companies in Australia:

1.Foreign Company

A foreign company or an overseas company is a company that sets up its business in Australia to operate its business activities. This foreign company must be registered with the Australian Securities and Investments Commission (ASIC) and comply with specific reporting and disclosure requirements.

2.Proprietary Limited Company

It is a common type of private company incorporated in Australia. Here, shareholders' liability is limited to their shareholdings. A minimum of one director and shareholder is required to establish this Proprietary Limited Company, which can have a maximum of 50 non-employee shareholders.

Additionally, this type of company cannot raise funds from the public through the sales of shares.

3.Incorporated Association

An Incorporated Association is a non-profit organisation incorporated at the state or territory level. This type of company is then governed by specific state and territory legislation according to its rules and requirements.

4.No Liability Company

No Liability Company is restricted to only mining industries; here, the liability of shareholders is limited to the amount unpaid on their shares. Unlike traditional companies, this has a unique structure.

5.Public Company Limited by Shares

This type of company allows companies to raise funds or capital by offering shares to the public. In Australia, at least one secretary and three directors are required for this type of company incorporation. Unlike proprietary limited companies, these companies are also subject to stringent compliance and reporting requirements.

6.Public Company-Unlimited

An Unlimited Public company is one in which shareholders are personally liable for the company's debts and obligations since they do not have any share capital or liability limit.

Eligibility Criteria for Company Incorporation in Australia

The eligibility criteria for company incorporation in Australia are as follows:

• An applicant company must have a minimum number of shareholders and directors. This specific requirement will determine the type of business structure in Australia.
• In the case of a proprietary business, a minimum of one director must be an Australian resident, whereas in a public company, out of three directors, a minimum of two directors must be Australian citizens. Additionally, the CS (company secretary) has to reside in Australia.
• All Directors and top management executives must be over 18 years old. The business owner must obtain written consent from a concerned authority before operating the business in Australia.
• According to Australia’s foreign investment regulations, a non-Australian who has purchased a share in Australia must obtain FIRB permission.

Document Requirements for Company Incorporation in Australia

The list of documents varies according to the type of company the applicant seeks to establish in Australia. However, given below are the most common types of documents required for company incorporation in Australia:

1.Propriety Limited Company

• Application form, i.e. form 201.
• Consent to act as a director, i.e. form 370
• Consent to act as secretary if applicable, i.e. form 371

2.Public Company and No Liability Company

• Details about the shareholders and directors
• Details of registered office address
• Shareholder agreement, if applicable

3.Incorporated Association

• Application for Incorporation of an Association.
• Association Rules or Constitution.
• The details or identification of the committee members, such as full names, addresses, and positions, must be legitimate.
• Details of registered office address.

Steps for Company Incorporation in Australia

If you are seeking company incorporation in Australia, then you must follow the given below steps:

1.Choose a Type of Business

The applicant shall choose the type of business structure they are willing to set up, ensuring that it aligns with their goals and objectives.

2.Choose a Company Name

Choose a company name that is not identical to the existing name of a company or a business. However, the company name availability can be found on the ASIC official website.

3.Choose the Company Operation Structure

Before registering the company, an applicant needs to decide on how the company will be governed by rules and regulations, such as replaceable rules, its own constitutions, or a combination of both.

4.Appointment of Director and Secretary

A minimum of one director and one shareholder needs to be appointed for company incorporation in Australia. This director must be at least 18 years old plus an Australian resident or hold a visa that allows them to work in Australia.

Additionally, this shareholder can be either an individual or another company.

5.Company Registration

A company registration in Australia can be obtained by applying through the ASIC website. This application must include information such as the company's name, directors, shareholders, and registered office address.

6.Acquire Australian Business Number

After the company is registered, the applicant must obtain an ABN. This ABN is a unique 11-digit number that identifies businesses in Australia and is obtained from the ABR website, i.e., the Australian Business Register.

7. Compliance with Tax Obligations

If a company's annual turnover exceeds AUD $75,000, it must register for GST (Goods and Services Tax). Also, it needs to lodge tax returns with the ATO (Australian Tax Office) on a regular basis.

Laws and Regulations for Company Incorporation in Australia

The ASIC (Australian Securities and Investments Commission) is the primary regulatory organisation that oversees business registration in Australia, and the Corporations Act 2001 of Australia is the main legal framework that primarily regulates corporations and financial products and services in Australia.

It is a principal legislation that regulates companies or businesses in Australia. It looks after the company formation and operations, officers' duties, takeovers, and fundraisings. This act has a total of nine chapters with multiple parts, with each part having a division. Some common outlines in this corporation act are company formation, corporate governance, share capital and shareholder, reporting and disclosure, directors' duties and responsibilities, insolvency and winding up, etc.

Post-Compliance Criteria for Australian Company Registration

After the company's incorporation in Australia, such a company needs to stay relevant by following the post-compliance criteria as per the Australian regulatory body. Given below are the post-compliance requirements that every company registered in Australia must comply with:

• At least one annual general meeting must be held within five months after fiscal year conclusions between the shareholders and within eighteen months of the company’s incorporation.
• A 75% vote is required for any resolutions to specific company issues.
• The businesses must maintain accurate financial records, which must be kept for seven years.
• The company must send ASIC an annual report, balance sheets, and financial statements.
• The amount of corporate tax would be 25% to 30%
• Every year, a company must file a federal tax return, and the Board of Directors must convene.
• The branch office and representative office must submit all documents required to be lodged according to the country of origin.

What are the Tax Policies in Australia?

It is important for every business owner in Australia to understand and know the tax policies so that one is aware of the business profits and losses. Given below are the key points to know about the tax policy of Australia:

1. Certificate of Registration of the Company issued by the ROC;
2. A company must pay a flat corporate tax rate of 30% on their taxable income.
3. Small and Medium-sized Enterprises (SMEs) are subjected to a lower tax rate of 25%.
4. Companies with a GST turnover of $75,000 or more must register with GST.

Timeframe of Company Incorporation in Australia

It is indeed straightforward to establish a company in Australia. However, the entire process takes 4 to 7 days to complete.

Fee Structure for Company Incorporation in Australia

The fees and costs for company incorporation in Australia range from AUD 400 to AUD 1,500, including professional fees and government charges.

Why Choose Enterslice?

The Enterslice is for those businesses who are seeing to go global. We have a professional team of experts dealing with company incorporation in several countries. We always keep our customers first and thus tailor solutions to their needs. Our services are extended to provide a correct source of knowledge, enabling our clients to make informed decisions while entering new domains or a business field. Thus, choose Enterslice for your best practices, easy registration process access, and other business growth assistance.