Company Registration in Australia- An Overview
Forming a company in Australia is quite straightforward. It takes about a week to incorporate a company in Australia. There is a separate authority for company registration process in Australia. It is important to suffice the requirements of appointing key executives for the company in Australia. An applicant must hire a resident director in Australia .These activities would include managing the company.
There are different metropolitan hubs which include Sydney, Melbourne, Perth and Canberra. For a company to be registered in Australia, the applicant would require an ACN (Australian Company Number), TFN (Tax File Number) and an Australian Business Number (ABN).
It is the largest country in Oceania which makes it a suitable country for an entrepreneur to start business. Australia has free trade agreements with other countries which allow it to carry out undisrupted trade. Apart from this, Australia has signed DTAAs with other countries protecting investors from double taxation. Any capital accrued in Australia can be repatriated to the home country.
The Australian government has a liberalised scheme related to foreign investment. Hence, an investor should go for the process of company registration in Australia.
Benefits of Company Registration in Australia
Following are the benefits of Company Registration in Australia:
- Free Trade Agreements
Australia has free trade agreements with other countries which allow it to carry out undisrupted trade. Apart from this, Australia has DTAAs with other countries which protect the customers from double taxation.
- Best Place to Start Business
In Oceania, Australia is the largest continent. It is one of the best places for carrying out various business opportunities. The corporate tax present in Australia is 30% for those companies who are generating annual revenue of more than AUD 50 Million per annum. However, if a foreign investor wants to incorporate a company in Australia, then the corporate tax payable is 25%. However, this would only be the case if the business turnover is not more than AUD 50 Million per annum. It is also a good place to carry out research and development activities.
- Stable Business Environment
Australia provides an ideal environment to carry out different forms of business activities. Such environment is supported by a stable political system. There are low inflation rates in the country. Due to this, an investor can go for the process of company registration in Australia.
- Educated Labour Force
There is diverse labour force and talented individuals in Australia.
- Financial Sectors
Australia boasts of a well developed financial sector. There are companies and industries involved in Insurance, Banking and Derivatives in Australia. These companies are present in financial centres such as Sydney and Melbourne.
Eligible Business Structures for Company Registration in Australia
The following are the types of business structures for Company Registration in Australia:
- Branch Office
A branch office is usually formed by a foreign parent company. The branch office in Australia is a mere extension of the parent company to carry out operations. Profit making operations can be carried out by the branch office in Australia. A foreign company would have to register the branch office with the Australian Securities and Investments Commission (ASIC) and the company will be assigned an Australian Registered Body Number. This would be mandatory as the Australian branch is carrying out business. Under Corporations Act 2001 (Cth) a foreign parent company is required to appoint a representative for the branch office. This is mandatory to ensure that compliance is followed by the branch. In order to set up a branch office in Australia, a registered office must be present having a local address. The Brach Offices are also required to submit annual financial reports to ASIC.
- Representative Office
This form of office is usually formed by a foreign parent company. The representative office in Australia is a mere extension of the parent company to carry out operations. Profit making operations cannot be carried out by the representative office in Australia. A foreign company would have to register the representative office with the Australian Securities and Investments Commission (ASIC).
- Public Company
A public company is an entity which is allowed to list shares in a publicly traded stock exchange. A foreign company going for this type of entity would require to have a minimum capital for listing shares in a stock exchange. The principle of limited liability is enjoyed by the shareholders of this type of entity. Minimum of one shareholder is required to form this type of entity. However, there is no limit on the number of shareholders of this type of entity. Shares can be offered to the public. However compliance must be maintained as per the requirements of the Corporations Act, 2001.
- Proprietorship Company
An investor considering company registration in Australia can establish this form of entity. Under company registration in Australia, the liability of this entity is not limited. There can be lesser than 50 shareholders for forming this type of entity. Personal liability of the shareholders is not present beyond a certain amount of agreed investment in the shares.
Eligibility Criteria for Company Registration in Australia
- Directors and Shareholders
An applicant for company registration in Australia must have minimum number of directors and shareholders. This would depend on the requirements of the specific form of entity. Some companies are required to have minimum of three directors. Minimum one shareholder must be present in the company.
- Residency Requirements
If the company is a proprietary company, it must have at least one director who should ordinarily reside in Australia. If the company is a Public Company, then it should at least have three directors and at least two of them must reside in Australia. The company secretary also must be a resident of Australia.
- Age Requirements
All the directors, shareholders and key management executives of the Australian company must be more than 18 years of age. Written consent must be obtained by the individuals to run the company in Australia.
- FIRB Approval
If there is an acquisition of shares by a Non-Australian, then FIRB approval must be secured under the foreign investment regime of Australia.
Procedure for Company Registration in Australia
The following procedure has to be considered for company registration in Australia:
- Choose the Business
First and foremost, the applicant must choose an appropriate business entity for company registration in Australia. Based on the requirements, the applicant must make a decision to choose the business. There are specific businesses that have limited liability. This would provide certain benefits to the applicant for tax. Registering the business structure is a different process from registering the company. Hence the applicant must choose the business structure and go ahead with the process of registration.
- Name of the Company
In the next step, the applicant must choose a relevant name for the company. There are few things to keep in mind before choosing the name of the company. The following are:
- The name of the company must not be identical to an already existing name. The name should not contain words that are misleading about the activities of the business. The name of the company should not be offensive or suggest any illegal activity.
- As per the ASIC, the name must be registered in an online register known as the ‘National Register’. Such requirement is mandatory after 2012. If an already identical name is present for the company, then registering the name would not be possible.
- Any alphanumerical characters can be used in the name of the company. This would include numbers from 0-9, semi colon, hyphen, symbols which depict currency such as ‘$’ and brackets can also be utilised.
- There are few words which cannot be used. Such words are restricted. The following terms have to be restricted: Government, Trust, Royal and Incorporated. Prior approval of the relevant government authority is required if such words are utilised.
- The name of the company must be unique and must not mislead any individual or organisation.
- If the name of the company is offensive, then the ASIC would have the liberty of refusing such a name.
- The legal status of the entity must be shown on the name of the company. For example the private limited company would have the suffix Co or Coy.
- Reserving Company Name
Once the name of the company is chosen and approved by the ASIC, the applicant would have to reserve the name. An applicant would have to utilise ‘Form 410’ for reserving the name of the company. Under company registration in Australia, this can be carried out through the following link https://asic.gov.au/regulatory-resources/forms/forms-folder/410-application-for-reservation-of-a-name/.
The name of the company, if approved, would be reserved for a period of two months. If the applicant fails to carry out company registration in Australia within that period, then an application for reserving the name must be again made. An applicant would have to make a formal request to extend the period off name reservation.
- Trademark Registration
The applicant for company registration in Australia, must conduct a conclusive search for trademarks and any other IP rights on the name. This can be conducted in https://www.ipaustralia.gov.au/ . If there are any conflicting names then such name cannot be utilised by the applicant.
- Constitution of the Company
Companies constituted before 1st July, 1988 in Australia were asked to prepare two separate documents called Memorandum of Association and Articles of Association. Now the companies are supposed to prepare only one document called the Company’s Constitution. of the company n applicant must choose if he wants to draft the articles of association of the company. The memorandum of association would also be an important document in company registration. ASIC mandates every company to either create its own Company Constitution or the company can choose the replaceable rules provided under The Corporations Act in Australia. These rules would be applicable to the constitution of the company. Either the company can utilise these rules or draft its own constitution as per the requirements. There are specific rules which have to be followed for company registration in Australia, in case the applicant is applying for a sole proprietorship.
- Compliances related to the Register
There are specific compliances which have to be carried out in accordance to the Corporations Act. This would include keeping the register of details updated. The register of the directors and shareholders have to be updated in accordance with the corporations Act.
After this, the respective consent of all the key management executives of the company must be obtained. This will include all the directors of the company, the shareholders and other key executives. Written permission is required for using the office.
- Registering the company
In the final step, the applicant would have to register the company. This can be carried out in the following link https://register.business.gov.au/ . The company can be registered either in the online method or the offline method. However, for the offline method, the applicant would require to provide details of the exception of the application, the transaction reference number and other information. Once the company application is received and processed, the ACN would be provided to the applicant. This would be utilised to apply for the ABN. The company name would be entered into the official registry and the certificate of incorporation would be sent to the applicant.
- Post Registration
The Company has to display its name in the official registered address of the business. The ABN must be noted in all correspondence. All the documents and emails should have the information related to the company.
Post compliance requirements for Company Registration in Australia
The post compliance requirements for Company Registration in Australia are as follows:
- Shareholders meeting have to be held within 18 months of incorporation and within 5 months of the end of its financial year. When it comes to resolutions for specific matters, then 75% vote is required.
- Board of Directors meetings have to be held every year. This must be carried out once.
- Federal Tax must be filed every year.
- Corporate tax levied would range between 25 to 30%.
- All the balance sheet, annual returns and financial statements must be filed with the ASIC. Such information must be filed with intervals of not more than 15 months.
- For a branch office and representative office all documents which are required to be lodged as per the country of origin must be submitted.
- Application Form (Offline Mode) ( Form 201)
- Name Reservation
- Constitution of Company or Replaceable Rules
- Form 410 – For reserving the name
- Information on the shareholders and directors
- Information on Registered Office Address.