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| Information - Registering a Company |
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What is a company? A company is an independent legal entity able to do business in its own right. It has shareholders, who own the company, and directors, who run the company. Where are companies registered? Australian companies are registered with the Australian Securities and Investments Commission (ASIC). ASIC is the independent Federal Government body responsible for the registration and regulation of Australian companies. Business names and company names If a company carries on a business in a name which is different to its company name, it must register the business name with Consumer Affairs Victoria,or the appropriate state body. If your business is not a company (a sole trader, a joint venture or a partnership) you must register the business name with Consumer Affairs Victoria, or the appropriate state body. The exception to this is if your business is trading under your own name. Does a company structure suit your business? Selecting a business structure in an important decision for any business. If a company structure best suits your business needs, it is highly recommend that you seek legal or other professional advice about your particular circumstances. Advice should be sought about issues relating to trading, legal obligations and taxation. Trading in Australia Companies registered under the Corporations Act 2001 are automatically registered as an Australian company. This means that it can conduct business throughout Australia without needing to register in individual State and Territory jurisdictions. Legal obligations A company director or secretary of a small company must follow the requirements set out in the Corporations Act 2001. Taxation privileges A company structure is a legal entity allowing privileges such as corporate tax rates or limited liability. How to register a company Step 1: Decide on your business structure Step 2: Choose a company name Step 3: Determine if you will operate under replaceable rules or a constitution or a combination of both Step 4: Obtain consents - member(s), director(s) and secretary(secretaries) Step 5: Complete and lodge the application form Step 6: Get to know your legal obligations Applications to register an Australian company can be made through Shelcom Corporate Services who use software that deals directly with ASIC. A company can be registered in minutes. Shelcom Corporate Services can also offer full company secretarial services including registers, consents and share certificates. As most companies in Australia are registered as proprietary companies, this is a guide to register a proprietary company. Step 1: Decide on your business structure You need to find out if a company structure best suits your business needs. We recommend that you seek legal or other professional advice about your particular circumstances. At this stage you should also make sure you understand what your legal obligations will be if you become a company officeholder. When a company is registered under the Corporations Act 2001 ('Act') it is automatically registered as an Australian company. This means that it can conduct business throughout Australia without needing to register in individual State and Territory jurisdictions. Businesses that are not companies (eg, sole traders and partnerships) are required to register their business name with the appropriate State/Territory authority (you can find a list on the Australian government's business.gov.au website). However, this is not necessary if the business is conducted under the name of the person or persons involved; that is, first name and surname, or initials and surname. Registration or use of a business name:
If a company carries on a business in a name that is different to its company name, it must register the business name with the appropriate State/Territory authority. While the requirement to register business names is not under the Act, business names are still recorded by ASIC's National Names Index, and the register against which proposed new company names are checked includes business names. Step 2: Choose a company name Company name must indicate its legal status A company name must indicate the company's legal status. A proprietary company must include the word 'Proprietary' or the abbreviation 'Pty' in its name. A company must also indicate the liability of its members in its name:
What names can and can't be chosen You can only choose a company name that is not already registered to a company or business. Also there is a list of words that you cannot use without special approval. You can search the National Names Index on our website at www.shelcom.com.au. The index lists all Australian company and business names. Certain words and phrases cannot be used in company names without the approval of a specified Minister or Government agency, for example words such as 'building society', 'trust', 'university', 'chamber of commerce' and 'chartered', as well as words suggesting a misleading connection with Government, the 'Royal Family' or an ex-servicemen's organisation. These restrictions make sure that a company's name does not mislead people about its activities. ASIC may refuse to register certain names if they are offensive or suggestive of illegal activity. Using the ACN as a name It is not necessary to give a company a name. If you prefer, the name of the company on registration can be its Australian Company Number (ACN), which we give a company when we register it. When you apply to register the company you do not need to nominate a name. Possible problems with similar names Even if ASIC reserves or registers a name, a person or corporation with a similar registered name may still take action against you. It is entirely your responsibility to be aware of any problems that might arise from names already registered which are similar to, or likely to be confused with, the name you register. Once you have selected a name, you can then proceed with Shelcom Corporate Services to register the company. If you are not yet ready to register the company, but want to make sure the name is still available when you do, then you can reserve that name. Reserve a name on Form 410 (optional) If you want to make sure that your intended name cannot be taken by another person before you are ready to register it as a company, you can reserve a name by simply contacting Shelcom Corporate Services. If ASIC approves the name ASIC will reserve it for you for two months. If you have reserved the name and the initial two months reservation time has not passed, you may apply to extend the two month period by lodging a second Form 410 with the prescribed fee. Shelcom Corporate Services will do this for you. Step 3: Determine if you will operate the company under the replaceable rules or a constitution or a combination of both Before you lodge an application to register a company you must decide how the company will be internally managed. That is, you'll need to decide if its internal governance operates under:
The basic rules for internally managing a company are included in the Act as 'replaceable rules'. The table under s.141 of the Act sets out the provisions of the Act that apply as replaceable rules. A company may take advantage of the replaceable rules in the Act to govern its internal management - it does not need to have a written constitution of its own. This means that companies choosing to be governed by the replaceable rules will not incur the expense of keeping their constitutions up to date with the law - even in the event that the replaceable rules are amended. Constitution A company may choose to adopt a constitution rather than use the replaceable rules:
The Australian Taxation Office (ATO) has specific clauses which the constitution of a 'non-profit company' (generally public companies) must contain to be eligible for tax concessions. Proprietary Companies A proprietary company must comply with sections 112 and 113 of the Act which states that a proprietary company:
Step 4: Obtain consents - member(s), director(s) and secretary(secretaries) Before applying to register a company you must get the written approval from people who agree to fill the following roles:
A public company must have at least three directors and at least one secretary. At least two of the directors and one secretary must ordinarily reside in Australia. For companies limited by guarantee, members are liable as contributories on a winding up of the company. Each member must agree in writing to the amount of 'guarantee' they will pay. Step 5: Complete and lodge the application form Shelcom Corporate Services will provide the application form to complete The proposed company name (if the company does not have a proposed company name, the name on registration will be its ACN)
Certificate of registration On receiving the application Shelcom will process the application with ASIC
Step 6: Get to know your legal obligations Display your company name A company must display its name prominently at every place at which the company carries on business that is open to the public. A public company must also display its name and the words "registered office" prominently at its registered office. Use your Australian Company Number correctly When ASIC register a company they give it a number known as the Australian Company Number (ACN). The company name, in legible characters, followed by the expression 'Australian Company Number' (or a permitted abbreviation - list shown below) and the number itself must appear on:
The abbreviations set out below may be used:
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