Having decided that a company is the right business structure, chosen a name, worked out who will be running the company (directors), and who will own the company (shareholders), how do you now go about registering it?
Company registration in Australia is governed by ASIC (Australian Securities and Investments Commission) with the large majority of companies being Proprietary Limited (Pty. Ltd.). Proprietary meaning that the company is privately owned, limited meaning the liability of the owners (shareholders) to pay the debts of the company is limited to the amount and price of the shares issued.
Check your chosen name
The first requirement is to ensure the chosen company name is available. The most basic check is to see that the name is considered identical to an existing registered company or business name, if not then ASIC will allow its registration. However checks for similar company/business names and registered or pending trademarks should also be performed. If they aren’t, the owner of a similar name/trademark can force a company name change at your own cost. At the time of writing this is $357, which is almost as expensive as registering the company in the first place.
Once the name availability is checked, the act of registering the company is very easy. It wasn’t that long ago that registration took days, accountants would register companies and keep them ‘on the shelf’ for clients when they needed one. These days a company can be set up in just a few minutes without the need to provide ASIC identification or signatures for the people involved.
1. Accountant or solicitor
This is the traditional way of setting up a company. Apart from having to book an appointment the main drawback is that it can be expensive, usually costing upwards of $1000, but depending on how savvy and hands on you are it could still represent good value. An accountant or solicitor will ensure the company is registered correctly and can also assist in the set up with the ATO as well as obtaining any required insurance, ie workers comp and professional indemnity. For an additional fee they can also act as registered agent to provide ongoing compliance.
2. Directly with ASIC
Direct registration with ASIC is also possible. The only advantage of going direct is cost, currently $433 for a Pty. Ltd. company. The disadvantages are the need to fill in a paper form and lodge it in the post or in person at an ASIC office, as well as providing all the company register documentation to satisfy the Corporations Act 2001 yourself.
3. Through a company registration service
A third option is to register the company using a company registration service, search ‘company registration’ in google to find some. Customers can lodge a company online without leaving home or the office and some fully automated websites can register a company 24/7 in minutes, subject to a few caveats. A further advantage is that nearly all online services will provide the required company register documentation within their advertised fee. An increasing amount of new company directors register companies with online services and most accountants and solicitors also use one.
If in doubt about the suitability of a company for your business, or another aspect of the registration process, you should seek professional advice from your accountant or solicitor. While costing extra upfront it could save you a lot of money down the track.