How to set up and register a company in Australia

For a company, this needs to be registered with ASIC and must comply with more regulations in comparison to other business structures. It is also more costly to establish, but you will have more access to capital. There will also be limited liability since a company is a separate legal entity (less responsibility for debts).

You need to establish a company name, outline how the company will operate and under what regulations, register the company and register an ACN on ASIC before applying for an ABN.

Whilst you don’t need an accountant for the actual process to set up a company, an accountant is a valuable resource for you to rely on.  Our Chartered Accountants at POP Business can:

• Scope out your registration costs
• Provide you with advice on best practice for you new business
• Determine the most tax-effective business structure for your company set up
• Provide cash-flow forecasting services and assist with your budget planning
• Assist you with ongoing company tax compliance including Business Activity Statements, Profit and Loss statements, cost analysis, and more.

There are several different structures for running a company, each of which has different benefits which may or may not be relevant to your situation.

• Sole traders have lower startup costs and simple to both set up and operate. However, a sole trader has unlimited liability for debts and obligations and less ability to raise capital.  Sole traders are also taxed at their individual tax rate – all company income is attributed to the individual owner. Find out more about sole trader tax returns here.
• Trusts can be useful for small businesses such as family=owned businesses who wish to increase their asset protection and leverage the ability to stream income to beneficiaries at lower tax brackets. Find out more about trust tax returns here.
• Partnerships are also relatively easy and inexpensive to establish, with partners paying tax on their individual share of the company’s income at their own individual tax bracket.  Partners are legally and financially responsible for the business’ debts and liabilities. Find out more about partnership tax returns here.
• Companies are more difficult to set up and have more regulatory requirements and set up costs involved.  However, companies are beneficial as they have a capped tax rate of 25% for base entities and 30% for other companies, making them more tax-effective than the other structures depending on company turnover.  Companies are also separate legal entities meaning owners have some form of protection for their personal assets. Find out more about company tax returns here.

Whilst there are several different types of company structures including sole traders, trusts, partnerships and companies, company formations can differ. 

• Private – companies that are privately held by its founders, management, or groups of private investors. Private companies can typically only gain funding outside of company profits through private investment.
• Proprietary Limited (Pty Ltd) – this is a form of private company that does not sell its shares to the general public and can have a maximum of 50 shareholders.
• Public – companies that have sold all or a portion of itself to the public via an IPO – shares are openly traded on the market with public shareholders holding a stake in the company.  Public companies are able to source funding through financial markets by selling stock, equity or bonds.
• Holding – a company that holds 100% of the shares in a subsidiary company.  This is sometimes known as a dual-company structure. The purpose of the holding company is to hold the assets and IP of the subsidiary company, providing a degree of liability protection for these.
• Operating – this is typically the subsidiary of the holding company and engages in day-to-day business activities.  The operating company will typically hold the legal and financial responsibility of any debts or liabilities.
• Franchise – sole traders, partnerships, or companies who license out their brand, products or services for a specified period in return for payment.

If you wish to register your company with ASIC by yourself, you can register your company through the Australian Government Business Registration Service. You can choose from the options which items you need to register for including:

• Australian Business Number (ABN)
• Business Name
• Australian Company and Company Name (CAN)
• Goods and Services Tax (GST)
• Pay as You Go withholding (PAYG withholding)
• Fringe Benefits Tax (FBT)
• Luxury Car Tax (LCT)
• Fuel Tax Credits (FTC)
• Wine Equalisation Tax (WET)

You can also rely on POP Business to register your company with ASIC.  We will make sure you know exactly which items you need to register for, the payments and fees you need to make and ensure you’re using the correct and most optimal business structure for tax-effective business operation.  Get in touch with us today!

Yes. You can find POP Business’s office smack-bang in the heart of Surry Hills, in Sydney. Suite 3, 2/2/12 Foveaux St, Surry Hills NSW 2010 (open in Google Maps).