Company Registration in Australia: A Procedure & Guidelines

Sonal Pruthi

13 Jan, 2021

There are various benefits of company registration in Australia. Australia has been witnessing an economic boom and growth for so many years. There are several business options available in Australia to enter the Australian market. The alternative is with the investor to join in the Australian market, to enter with the new Company, or with the foreign Company acquiring another company.

Several factors should be taken by the investor before planning company registration in Australia. The investor either needs to select a new Company or a foreign company or acquiring an existing company. A number of business structures are available, and each has its regulations.

Kinds of business – for Company Registration in Australia

1. Sole Proprietorship
   The cost of establishing the sole proprietorship business in Australia is cost-friendly. The process is easy. The owner has the complete responsibility of the business. He is responsible for all the debts and losses occurring in the sole proprietorship business. He controls and manages the entire sole proprietor business. He is accountable to file income tax returns (ITR) using his TFN (Tax File Number).
2. LLC- Limited Liability Company

This type of Company has a complex structure. It is established as a separate legal entity. The shareholders and directors are not personally liable for any liability or debt arising out of the company operations. The directors are responsible for business operations, but they are not the owners of the Company.
The company Incorporation in Australia can be done through ASIC- Australian Securities and Investment Commission. The Company as an LLC has to file the tax returns annually with the ATO.

3. Partnership Firm

The minimum number of members are required to start the partnership are two. The total members/maximum member’s necessary to constitute the partnership business is twenty.

There are 2 kinds of Partnership business in Australia:

• Limited Partnership Firm
• General Partnership Firm

The cost of formation is inexpensive in Australia. The characteristics of the partnership are:

• It is a separate legal entity.
• The partners of the firm are liable individually for all the debts and liabilities incurred in the course of business.

A partnership business is required to file: Annual Tax to the Returns at -ATO- Australian Tax Office and Individual Tax File Number is necessary for this purpose. The partnership can use the CAN- Australian Company Number, which is allotted to it. The GST registration is mandatory if the total worth of partnership is $75,000.

Minimum Requirements – for Registration of Company in Australia

1. For Sole Proprietorship Company

• Director- 1- must be residing in Australia
• Shareholders -2 –must be crowd source funded; the majority of them must reside in Australia.

2. For Public Company
   

• Directors- 3- the majority of them must reside in Australia.
• Company Secretary-1- must reside in Australia.
• Alternate Director- can be appointed by the Director of the Company for a fixed term. Alternate Director has full rights or selected rights of a director. The alternate directors can act as alternate for one or more directors of the Company.

Requirements of a Company Registration in Australia

1. Register for GST

It is essential to register for GST by obtaining digital Australian Business Number if the annual turnover is $75,000.

2. File for Corporate Tax

The Company will have to pay Corporate Tax @27.5% if the annual income is less than AUD 2 Million in a financial year.

3. Australian Business Number

If the annual turnover of the Company is more than AUD 75,000 in a financial year, one has to submit an online application, to get the ABN at the entry of the business.

Requisite Documents for Company Registration in Australia

• Australian Business Number^[1]
• Business Name
• Tax Registration
• License Number and Permits
• Company Governance and structure

Procedure for Company Registration in Australia

The ASIC- Australian Securities and Investment Commission is the primary regulatory authority for Company Registration in Australia.

Every Registered Company has to obtain the ABN- Australian Business Number, which is 11 digit unique identification numbers for Company Registration in Australia.

Steps as follows:

1. Deciding the type of Company Structure

• Sole Proprietorship
• Partnership
• Company
• Trust
• Joint Venture

2. Establishing the Internal Governance Structure

• Procedures for the director and member meetings
• Share structure & transfers
• Director appointment and removal

3. Registering the business with ASIC

• Submission of the form ASIC 201 Application Form, and the registration fee applicable is AUD$ 408-AUD $ 485.
• After the approval of the application by the ASIC, it will issue the ABN and a certificate of registration for the business.
• With ABN, the business becomes more identifiable, and it can be used for legal issues.

ABN for the Company-

• The Company is conducting/ starting a business in Australia
• Producing supplies connected with Australia’s indirect tax zone
• A Corporations Act company

4. Reserving the name for Company

• The Company must lock or reserve the proposed names of the Company at the website of ASIC- Australian Securities and Investment Commission.
• The name will be issued to the Company within 2-5 working days.
• The cost of the Company’s registration is AUD$ 36 for 1 year and AUD 85 for 3 years.

5. Tax Registration and Compliances

The Company must have the requisite Tax File Number-TFN, where it can apply for certain exemptions.

6. Company Registration in Australia – as a foreign company

As per the Corporations Act, a company is listed as a ‘foreign company’ when it is a company from outside of Australia. Like every other Company, the Company must be registered with ASIC to practice business in Australia.

Documents required:

• Form 40 2- Application Form
• A certified copy of the entity’s certificate of incorporation/registration
• Present a certified copy of the entity’s constitution
• Form -418- Memorandum of appointment of the local agent or power of attorney, which in favour of the local agent
• MOA-A memorandum stating the powers and rights of individual directors

Conclusion

It can be concluded that all these steps must be fulfilled to get registered in Australia. The benefits of company registration in Australia are that due to the lowest tax rates, it becomes a favorite destination for the investors. Where the corporate tax rates are only 27.5% and fewer compliance difficulties are faced by the investors. Forming the Private Company reduces the tax bills.

Read our article:Registered Office Requirement for Private Limited Company