Company Registration FAQ's
Although, any business that partakes in this creation of a company can recognize that the process is complex and very legal in its process creation. This is why when you are looking to participate in this one of your best opportunities is to seek the resources of a professional company who is looking out for your best interests as you register a company.
Maintaining peace of mind is often hard to accomplish as you venture into the legal mess that is associated with registration of a company. Individuals are seeking the most problem free opportunities available when looking to begin this process. Although, when you do make the smart decision to utilize a professional source it is also important that you understand what your company is investing in.
Many businesses will promote the opportunity to register a company and will provide your business with the most basic do-it-yourself programming available while charging you hundreds of dollars. For some companies this is satisfactory but for others even with the DIY programming it still proves a difficult task to accomplish.
It is important to recognize that there are companies who specialize in looking to go beyond the limits of supplying you with software. In fact, when you discover the best businesses to register a company you will be tapping into a unique resource. These businesses will not only supply you with the appropriate forms and software, they will also provide you with the opportunity to access real individuals with a high knowledge of the process.
This opportunity to utilize real individuals will provide your company with the greatest opportunity to achieve registration success, limiting the risks of error. In addition the companies will process your registration in order to ensure that your process goes through with great success.
Any form of legal documentation comes with a great deal of misunderstanding along with a high probability of risk when not accomplished properly. This demand for accuracy places a need for the utilization of experts when you take the steps necessary to register a company. Of course not all businesses are equal and it is important that you weigh your options when investing to register a company.
Make sure that you will have the opportunity to not only access live individuals when creating your documentation but that you will also have your paperwork processed by a professional individual. To discover the ideal resource to aid your company registration visit www.companiesnow.com.au/companiesnow_responsive
Although the excitements related to those opportunities begin to lose their luster as you discover the complex environment that is surrounding how to register a company. This environment is not welcoming and is often filled with complexities that few individuals understand as this knowledge has never been demanded from them.
A lack of knowledge in this environment is accompanied by many great risks since this is not only an effort to create your business but is also a legal creation. When you enter any legal environment it is important that you understand exactly what is expected of you and the risks that are associated with it.
When you make an error in any legal documentation you run the risk of your attempt to register new company to be rejected, regardless of your financial investment. If your documentation is accepted then you run a greater risk of fines and penalties when those errors made on implementation conflict with your business venture. When any company looks into how to register a company the first step that should be recommended in any literature is to seek the services of a professional.
With the resources of a professional in place you will be investing in your best opportunity to succeed in your efforts to register new company. The experts will be able to supply you with the appropriate documentation as well as the software that will be needed to complete your documentation.
Furthermore when you utilize the best companies to aid you in how to register a company you will tap into trained individuals who possess a high level of knowledge of the system, allowing you the greatest opportunity to succeed in your company creation endeavor. Just make sure the company you are investing in for aid has individuals helping you throughout the process from start to finish in order to maximize your business creation opportunity.
Business creation can be a headache for any company and the opportunity to register new company does not ease in that creation. Of course when you are looking into how to register a company one of the greatest opportunities exist with the utilization of a knowledgeable professional. Through their expertise you will be able to create your company without fear of business rejection or penalties following the creation of your company.
Obtain peace of mind by accessing a business that specializes in what you are looking to obtain. To discover your best resource in discovering how to register a company, visit www.companiesnow.com.au/companiesnow_responsive
Under Australian corporation laws, a company is required to display its legal status along with the company name. A proprietary status is indicated by the abbreviation “Pty”. Typically, the shareholders of a proprietary company prefer to limit their liability in the business of the company. The shareholders’ limited liability is indicated by the abbreviation “Ltd”. So, in a nutshell, when a company name is followed by the abbreviations “Pty Ltd”, it means that it is a proprietary company with limited liability.
Only ‘legal persons’ are allowed to own and hold shares in a proprietary limited company. However, while this implies that only humans who have attained the age of 18 years may be shareholders, in reality a legal entity, like a duly registered company can also be a shareholder of a “Pty Ltd” company. This is because a company is legally defined as a ‘person’.
The Corporations Act stipulates a company’s legal status and independent personality. Under the Act, a company has been conferred the power, not just to sue and be sued, but also to own property which includes shares in another company.
An entity becomes a legal person the moment the Australian Securities and Investments Commission (ASIC) issues a certificate of registration and allocates an Australian Company Number (ACN) to it.
It follows then that other business structures that are not registered with the ASIC may not have the legal personality to own shares in a proprietary company. Examples of non‐qualified forms are unincorporated trusts, joint ventures and unincorporated associations. These arrangements are determined by private agreements and are not regulated by the ASIC.
For other business forms to be able to own a share in a company, they have to become incorporated, and register as a company with the ASIC. For example, in order for, say, the Jones Family Trust to take part in the shareholdings of a company, it must authorise a corporate trustee, e.g. ‘Trustee Pty Ltd’ to hold the shareholdings on its behalf. Consequently, ownership of the share of the corporate trustee will appear as “Trustee Pty Ltd in‐trust‐for Jones Family Trust.”
There are various reasons for a company’s decision to hold shares in another company, and a good example is if a company decides to create a separate entity to operate another business line. This move has numerous benefits for both companies.
For instance, if two separate companies form an into agreement about a joint venture, an incorporated entity with both companies holding shares in it may be deemed the appropriate vehicle for such a set‐up. This is particularly useful in long‐term arrangements.
The ability to become a shareholder in a company is one of the things that places a legal entity on equal footing with a natural person.
Meeting any legal requirements to make your business a legitimate venture is another major prospect that needs to be addressed when starting your own company. When it comes to the legality of the business environment, one of the best ways to accomplish this goal is through company registration.
When you register new company you are taking the first steps to creating a business that can compete in any atmosphere of the business environment. Although like with many other aspects, legal issues can be complicated and when not handled properly present many risks in the future. Unless you are an attorney or an individual adept in the legal field of business, it can often be overwhelming when entering the legal parameters of company registration.
When you are looking to register new company it is often recommended that you seek a professional resource that can provide you with the expertise required in this crucial process. When you access this professional knowledge you can feel confident that you are securing the safest methods to aid you in company registration.
One example of the complexity that can be found when you register new company relates to the formation of the company. Many company registration procedures require that you identify the identity of your company and the structure in which it will be established. For the legal process this aids a company in defining who is in charge and what individuals are responsible for the different aspects of the business venture.
While this may seem like a minor step in company registration it is crucial to the legal proceeding of a company formation and should not be looked upon lightly. When you utilize a professional to register new company they can help you so that you understand the legal contract you are entering and what will be expected of every member identified.
Company registration is a big step in starting your own business and it is crucial that you follow the right procedures to get off the ground in the most efficient manner possible. When you work with a leader in the company registration field you can feel confident that your business it being properly registered.
Resource Box: Seek a business that promises one hundred percent satisfaction guaranteed by visiting www.companiesnow.com.au/companiesnow_responsive
The best sites are one‐stop centers with a comprehensive line‐up of services to support start‐up companies from name reservation and company registration to website development and accounting services. These business providers may also connect you to resources of the Australian Tax Office, the Australian BusinessRegister and IP Australia.
But before you rush to the first website you see, you may wish to know how much it will cost to register your new proprietary company. Since the Australian Securities and Investments Commission (ASIC) is the primary regulatory agency for companies, you will have to pay some fees to ASIC, such as:
Name reservation fee
If you’re not ready to officially file the Form 201 required for registration, it’s a good idea to reserve your proposed company name to prevent it from being snapped up by someone else in the meantime. The reservation fee is $40 and is good for two months. After that, but before the expiration of the 2 months, if you wish to extend the reservation period, you can apply to ASIC for an extension. If an extension is granted, you will need to pay a reservation fee of $40 for the extended period (another two months).
ASIC lodgement fee
A uniform rate of $400 is charged by ASIC at the time of filing Form 201 for the registration of a company. If you choose to register your new company with the help of a business service provider, then this amount is normally included in your provider’s registration package. If you choose to register your new company by yourself, then you must submit your application for registration, together with the payment of the lodgement fee of $400. A receipt for this will only be issued by ASIC if requested.
Service provider fee
While anyone can lodge an application for company registration directly with ASIC, an experienced ASIC accredited business service provider can do the same for you with ease, in a relatively short period of time. This leaves you free to concentrate on the business of your business. If you lodge your application for registration using the website of a business service provider, a service fee is charged for the use of the provider’s website and online facilities. While the service fees are not uniform, you may expect to pay anywhere from $130 to $170 for the basic company registration package. Always ensure that the service provider has been accredited by ASIC.
Shareholding While this is not an amount to be paid to ASIC, you will need to commit some money to fund the initial capital of your company. A ‘proprietary’ company that is ‘limited’ is required to issue shares to its shareholders. Details of shareholdings, such as shareholder names, along with their paid and unpaid amounts, must be specified in the Form 201 (company registration application). So if you are also a shareholder of the company you wish to register, you may have to buy some shares in that company. For more information, visit the company registration FAQ page.
In order to keep on top of the requirements, your company will need to assign an officer to handle its regular
obligations to ASIC in order to avoid penalties and sanctions by the government. The following are documents and fees that your company must prepare, submit and pay to ASIC yearly:
1. Annual Review Fee.
All companies registered with ASIC are required to pay this amount, whether or not the
details appearing in the Company Statement are correct. For proprietary companies, the annual review fee is
$212. The payment of the annual review fee may be paid in advance; otherwise, it is due within two months
from the annual review date which coincides with the anniversary date of the registration of your company.
verify this date, you can log on to ASIC’s National Names Index and use your Australian Company Number
(ACN) as reference.
Late Payment Fee.
If your company does not pay the annual review fee on time, it will have to pay a late
payment fee of $65, on top of the annual review fee. For payments made more than one month after the due
date, your company will have to pay the late payment fee of $270 plus the annual review fee of $212.
2. Lodgement of Changes.
A few days before the anniversary of the incorporation of your company, ASIC will send you an Annual Statement which will consist of a cover letter, your Company Statement and an Invoice for the collection of the annual review fee.
The company statement is a document showing the current details of your company as they appear in the ASIC database. ASIC deems it of the utmost important to maintain accurate and complete records for all the companies under its jurisdiction. Thus, ASIC will send you your company statement annually for you to examine and verify.
If there are no changes in your company statement, all you have to do is pay the Annual Review Fee. If your
company needs to report changes in the details appearing in its company statement, then you should
complete and submit to the ASIC a Form No. 484 with the updated information.
The lodgement of Form 484 must be made within twenty eight (28) days from the date of the issuance of your company statement. If it is filed on time, your company will not have to pay for its lodgement. If Form 484 is lodged within a month from the time it is due, then your company will have to pay a Late Review Fee of $65, in addition to the annual review fee. If it is filed more than a month after its due date, then your company will have to pay a late review fee of $270.
If both the annual review fee and the lodgement of the updated company statement are in delay, then your
company may have to pay:
Annual Review Fee + Late Payment Fee + Late Review Fee
You should ensure the timely payment of the annual review fee and the lodgement of any changes in your
company statement. If the annual company statement does not reach you within a few days from your
company’s annual review date, then it is best to contact ASIC immediately about it.
3. Solvency Resolution.
In addition to the payment of the Annual Review Fee, ASIC requires the directors of all companies to pass a solvency resolution yearly. A solvency resolution may be positive or negative. A positive resolution is passed if the directors believe that the company’s assets are sufficient to meet all its obligations as they fall due.
In such a case, there is no need to submit a copy of the resolution to ASIC as the mere payment of the annual review fee is a presumption of the passage of a positive solvency resolution. On the other hand, if the directors pass a negative solvency resolution, it means that the board is of the opinion that the assets of the
company are not sufficient to meet all of its obligations when they fall due.
In this situation, your company must complete and submit Form 485 which is the Statement in relation to
company solvency to ASIC. The solvency resolution, whether positive or negative, must be passed within two
(2) months from the annual review date. And Form 485 must be lodged with ASIC within seven (7) days from
the passage of the negative solvency resolution. If your company does not pass a solvency resolution, then it must still lodge Form 485 with the ASIC within in two (2) months and seven (7) days from the annual review date.
4. Copy of audited financial statements and reports.
If your company is required to submit audited financial statements annually then you must lodge Form 388 “Copy of Financial Statements and Reports” together with your company’s audited statements within three months from the end of the financial year with ASIC.
While no fee is prescribed for lodgement of these reports, your company may still be subjected to a late
lodgement fee if the required form and reports are lodged more than three months from the end of your
company’s financial year.
5. Notification of changes in company details.
Aside from the modifications made to the annual company statement, your company is required to disclose periodically any change or changes in the details of your company within twenty eight (28) days from the occurrence of such changes. This obligation to disclose changes in your company’s details subsists all year round. Examples of details that may change in the meantime are your company’s office address, names of shareholders, names of directors and their addresses. Failure to lodge the appropriate ASIC form showing such changes may subject your company to a late lodgement fee.
ASIC has a number of prescribed forms for other corporate actions that are only lodged when necessary.
These forms are not annual requirements. While some of these lodgements may not have any filing fees, you
may still have to pay late lodgement fees to the ASIC if you submit any of these documents beyond the
required period. You can get more information about ASIC and other regulations on the Companies Now
website at www.companiesnow.com.au/companiesnow_responsive
Indeed, it is relatively easy for anyone to set up a new company in Australia. Registration can be completed online and in as early as one day. Other business requirements such as business name registration and goods and services tax registration may also be completed online.
Existing corporation laws make it possible to register a company quickly. Unlike most countries, Australian law does not require a new company to have a constitution or a set of articles for its incorporation. Corporate seals for Australian companies are also optional now.
In other countries, regulatory agencies usually require incorporators of new companies to come up with a minimum amount to support an application for registration. This amount is divided into shares and must be verified by means of a bank certificate stating that the minimum paid-up capital is in deposit.
In Australia, however, this is not the case. Australian start-up businesses are not unduly burdened by strict minimum capital requirements.
Australian corporation law does not specify how many shares a proprietary company must have nor how many shares each shareholder must own or hold in his name. The only requirement is for a proprietary company to have at least one shareholder.
In the Form 201 to be submitted to the Australian Securities and Investments Commission, the applicant for company registration must also include a list of its shareholders and their respective shareholdings. A breakdown of the amounts paid and owed from each shareholder must also be indicated. There may be no minimum amounts required, but it is a practical measure for you to raise an amount that is sufficient for your company’s operations.
Once your shareholdings and those of your other shareholders are stated in the registration form, the same shall form part of your company’s details. Any changes therein will have to be reported within twenty-eight (28) days under pain of penalty. Furthermore, since your liability for your company’s obligations is limited by the value of your shares, you will have to keep all information about the status of your shareholdings current.
Another point to consider is how much capital you should be able to show to prospective business contacts. It is a fact that new clients normally consider the shareholder base of a company in assessing its stability. Meager capital resources may put your company at a disadvantage. Other companies also maintain minimum standards when dealing with new companies. They may consider capital size as a prerequisite for entering into business contracts with you.
Determining just how many shares should be issued and how much capital should be infused is a business decision for you to make. The right value should be an amount that is realistic to your shareholders, sufficient for your operations and acceptable to your clients.
For a more in depth understanding of the Public Officer read the article below:
While your company is a legal person by virtue of a certificate of registration, it will still need a live human being to perform specific acts on its behalf, like signing and submitting documents. For purposes of your company’s registration and operations, you will need to appoint a public officer to represent your company in dealings with government agencies like the Australian Tax Office (ATO) and the Australian Securities and Investments Commission (ASIC).
The Income Tax Assessment Act of 1936 requires all companies doing business in Australia to have a public officer. Under this law, a public officer is a natural person, at least 18 years of age and a resident of Australia who understands his role as your company’s representative. The appointment must be made immediately and no later than three (3) months from the time that your company has started doing business.
Government offices require you to designate a public officer for your company’s dealings because existing laws prohibit the wrongful release of company information to unauthorised persons, and they are careful not to violate privacy laws. To ensure the smooth running of your company, and its protection, you must appoint an authorised representative and inform ASIC and the ATO of the identity of your public officer.
Australian law requires your company to have a public officer at all times. This means that if your public officer has resigned, has passed away, is incapacitated or terminated, then you should appoint a replacement immediately.
When there is a change in the identity of your company’s public officer, you are required by law to communicate such fact and identity to ASIC within twenty eight (28) days. Without any such notification, the name of the public officer last appearing in the database of the ATO and ASIC will be deemed properly authorized.
For your company’s protection, you are strongly advised to notify ASIC or the ATO of the new public officer’s name as soon as you can without exhausting the twenty-eight day period.
The position of a public officer is a highly responsible one. Your public officer is expected to manage all instruments the law requires your company to lodge and tp keep the required records. The public officer is responsible for your company’s compliance with all of its legal requirements.
Furthermore, whatever your company’s public officer does while in the performance of his duties is deemed an act of your company. Official notices received by your public officer are deemed to have been properly received by your company. Legal proceedings against your public officer are also deemed instituted against your company and the company shall be jointly liable with the public officer for any penalty that may be imposed on him or her.
So it is necessary to not only appoint a company representative, but such a person should be carefully selected as they hold the key to your company’s compliance welfare.
Below is an article that we have written on the topic if you wish to know more.
Are you planning to operate a small business on your own?
There are two business structures that may be appropriate for a small outfit like yours: a single proprietorship (sole trader) or a registered company.
While you may consider setting up a single proprietorship, the Corporations Act of 2001 does allow you to set up a company with just one person to own and run everything.
If this is the way you want to go, then all you have to do is indicate your choice in the ASIC registration application as “a proprietary company with limited liability”.
You will be both the sole shareholder and the sole director of your company. Thus, your type of company is legally referred to as a sole shareholder/director proprietary company.
You may wonder why anyone would choose to register as a sole proprietary company rather than as a single proprietorship. Well, there are some real advantages to being registered as a sole shareholder/director company. Some of the reasons people choose a company over a proprietorship are:
* Legal personality of company.
Once a company is registered with the ASIC and an ACN has been is issued, the company becomes a legal entity with a personality that is independent and separate from its shareholder.
This distinct personality has important legal effects: A company can enter into contracts in its own name and it can also sue, and be sued. When a company is in debt, the money owed does not automatically become the debt of the shareholder. As a result, a civil lawsuit for the collection of a sum of money against the company is not necessarily a legal action against the shareholder.
This is because the liability of a shareholder is limited to the value of his shareholdings unless he previously signed a personal guarantee in favor of the one pursuing legal action. This built-in limitation is not available in single proprietorships or for sole traders. So if you are conducting business by yourself, and you wish to limit your business liability, then the sole shareholder proprietary company is for you.
* Flexibility in ownership
If your business grows in the future and you wish to create incentives for your non-shareholder employees who have contributed to the success of your company, then a good way is to increase their involvement by transferring shares in the company to them.
This is also known as a stock option. Because of the company’s structure, you are able to accommodate additional non-shareholder employees into the company shareholdings without having to terminate the company’s legal status.
Another advantage of the independent personality of the company is that it may continue to exist for the duration of its registration, notwithstanding changes in the ownership of the company’s shares.
The death or retirement of a shareholder or the sale, transfer or assignment of the rights to a company’s shares will not mean the termination of a company’s existence. You may one day decide to hand over the reins of the company to someone else, such as one of your experienced managers or employee-shareholders. While the director may be changed, the company continues to exist as its registered self.
It is possible to register a company online, but if this is a daunting prospect for you, ASIC has appointed registered agents, like Companies Now (www.companiesnow.com.au/companiesnow_responsive ) who can advise and manage your online company registration.
It is simple enough to know what the sole proprietor and the partnership involve. But it can be difficult to understand what the Pty Ltd company is. Let’s first take a look at the pros and cons of starting a Pty Ltd Company.
As a Proprietar Limited company the company itself stands legally as a separate entity. That means it is liable for itself. In the Pty ltd company there are share holders and their liability to the company is limited. This means that when they invest into shares they are only risking their investment. They can’t lose more than that.
Pty ltd companies can be started by one person or by several people, which gives a lot of freedom for who you want to work with and include in the beginning phases of business. On top of all of this the company is not terminated by the death of a shareholder nor a bankruptcy of a director or shareholder, because it is an entity of itself. Additionally minors are allowed to be shareholders as well, giving you that much more room to get investors.
On the other hand Pty ltd companies tend to have higher initial costs and the on-going cost of business is also usually more. There are more people in the company so it can take more time and work to make decisions and changes in the company. Pty Ltd companies are also taxed differently, actually they are taxed on company tax. This is called the corporation tax and it is 30%, as a sole proprietor or partnership you aren’t taxed this way, but of course there are pros and cons of this tax as well, depending on how much money the company makes.
Another con for Pty ltd companies is when you want to break them up, or close the company, there is a lot more involved because of shareholders, and who owns the company and such. This is part of the company being so complex in the way it is set up, which again has its good and bad points.
One last con of having a Pty Ltd company is the directors have a lot responsibility. In addition to everything they are responsible for with other company structures, they also have to follow many rules as outlined in the Corporation Law. This means they have to be especially careful to consider all options for the company and make sure all applicable guidelines are being followed. This could be very time consuming and it may help to have additional directors because of all the work involved.
Pty Ltd companies are definitely more complex than other structures, but they usually have a lot more room for growth and can attract new investors quickly for up coming projects. While it might cost more to start a Pty ltd company, the ends may justify the means if you can handle the extra work and complexity of the structure.
You have come to the right place. If you want to register a new company there is a fair bit to do before you can get started. You have to make a few decisions, then collect a the appropriate information, and last but not least register.
No worries though, we can lead you right through all of this and once you have determined who is involved in your company and the structure it can take as little as a couple of minutes to have your company registered.
The first thing to do is relax. Now, do you have a business name in mind? If so, you have to check and make sure the name is not already taken or trademarked by someone else in the business databases (this can also be handled by a registered ASIC agent like Companies Now).
If you do not have a name in mind, take some time to think about it. You should incorporate professionalism and the services or products you will be offering into your name. If you can also make it memorable, the easier it is to remember the better for your customers (also the last thing you want for your business is customers having to guess what it is that your company does).
Once you have a name you need to decide on the structure of your company.
Do you want to be liable for your company, if so how liable do you want to be. Do you want to work with others that will be owners or directors in your company, and if so do you know who or how you want to operate the company? These are very important questions you have to answer in order to begin the registration process. You should take most of your time preparing to register to focus on the structure of your company and how you will operate it (if you are unsure please consult with your lawyer or accountant).
You will have a few choices with the structure that will determine your protection and liability with the company, and then you will have the choice of how to operate. For the operation you can decide if you want to go by constitution, replaceable rules, or a combination of both of these.
Once you have made the decisions on these you can gather the information you need to fill out the registration form. You will need the names, addresses, dates of birth and city of birth of every person who will have a vested interest in the company. This would be the owners, the directors and secretaries.
You will also need the names and dates of birth of the share holders, as well as how many shares each person will start with. In addition to this you need to have the mailing address and the physical address of the proposed company.
After you have all of this information gathered and you wish to register the company yourself through ASIC you can grab the form 201 off the Internet and begin to register your new company. All of the instructions are included on the last 2 pages of the form as well as other documents you will need the fee to register. The address to send in your registration is available as well.
Now it is much easier to start a corporation and in fact you can have one up and running within hours if you wanted to. You no longer have to use others to help you get started, but it would still be a wise decision to do so because it will be much faster and easier, as these people are professionals with all the information and forms and software directly linked to ASIC to get you started as soon as possible. Not to mention if you don’t complete the forms correctly they can assist you to make sure it is set up right from the beginning.
Like we said shelf companies used to sit on the shelf, waiting for someone to come along who needed them. Then they would be sold and everything would be switched to the new owner. This was actually faster than starting a new corporation so that is why it was so popular. Even though it was faster it was not cheaper and people had to pay more for the corporation and getting everything like the company name and the directors and such changed.
Today the Internet makes it a lot faster to register a corporation and so a lot of people no longer are interested in shelf companies. But there are some reasons you might still want to consider a shelf company if you are looking to get into business relatively quickly.
First of all it is an aged company. This means you are going to have a better chance at getting credit, loans, and investors, just because the company has been around awhile. Another reason is that some jurisdictions in Australia will only allow you to bid on contracts if you have been in business for so long. There may be other restrictions you will have to adhere to as well, so if you are interested in working on a certain project or doing something specific with a new corporation or company, you might want to find out a head of time whether it is worth it or not to purchase a shelf company or to go for your own corporation.
Although shelf companies used to be in demand much more than they are today, there are still some good reasons to check them out before you start your own business. While it might be more expensive to purchase a shelf company you might find the longer in business the company is the better chances you have of seeing quicker results. Take all of this into consideration with your financial and legal advisers before you decide how to become incorporated.
Before the Internet came along it was a lot more difficult to start a corporation. It took a lot more time and it was even more costly. Because of this there were companies that would make up and register corporations that would then sit on the shelf so to speak so that when a customer needed a corporation as soon as possible there was something available for them.
The only thing you may wish to do is when you receive your company register (if you order the physical register) is to complete the ABN application and send it to the governing body.
In Australia there are 4 positions that are held in a new company. They are the owner, the director, the public officer and the secretary. The owner of course is you, the person who is registering the company. You are expected to manage your company, and all of those you work with. You are the one who is legally responsible, because your name is on the form. As the owner you might also be the director, depending on how you have set things up.
As the director (at least 1 of the directors must be an Australian Citizen) you are required to do several things. First and foremost you are expected to be honest. If there are other directors during meeting you should always make sure they know of any personal interest you have in company dealings. It is also your job to make sure the company is able to pay all debts when they are due, and you absolutely must keep the company financial records up to date.
You are also required to be careful with the information you get pertaining to business dealings. You should not be sharing what your company gets as orders or refunds or who your customers are without your customer’s knowledge and approval. Depending on the kind of company you have you might have some privacy issues you have to keep in order as well. As a director you must always know what is going on within the company, especially if you are handling other people’s money.
You should also always act in the best interest for the company, regardless of what your own interests are. Also as a director you have to be sure to stay in contact with your employees, and you should seek help from legal and financial advisers if you need to for the company’s behalf. Being present and contributing to company meetings is also part of being a good director.
The Public Officer is the person whom is answerable for everything that is required to be done by the company for tax-related purposes and, if in default, is liable to the same penalties. The public officer is not, however, personally liable for payment of tax due by the company
Under Australian taxation law, every company carrying on business or deriving property income in Australia must, unless specifically exempted, at all times have a public officer. A public officer must be appointed within 3 months of the company commencing to carry on business or first deriving income in Australia.
As the company secretary you would be in charge of running the company office, as well as responding to any communications with the ASIC in regards to any changes that are made within the company (such as a move of location or change of director etc). If you are part of a public company you should be taking the responsibility of making sure the office is open to the public during business hours. A secretary will usually keep the company in order, keeping the calendar up to date and taking care of company communications.
You can be a secretary and a director at the same time, and the secretary must live in Australia. The secretary is normally assigned by the director of the company. These are not all of the roles to play as the director or the secretary and if you have questions you should make sure you get them answered by ASIC or legal advisers so that you are always within bounds of running a responsible business in Australia.
If you order the soft copy (email Documents) you can receive the company in as little as 20-30 minutes. It is always good to allow up to 1-2 hours as some times ASIC take a little longer to incorporate your company.
If you want the documents sent to you in the physical form, if you order prior to 2.00pm the binder will be sent via First Class overnight TNT service.
You will however receive the ACN and Certificate of registration within 30 minutes – 1 hour of ordering.
When you are registering a new company you will have to start out from the beginning. You will first choose the business or company name.
TIP: If your company will be providing products or services to clients it is recommended to have a relevant name that relates to your business. You do now want clients having to guess what you do.
Click here to see if your name is available
Then you have to decide on the structure of the company you are registering.
There are a lot of options here such as the liability you will have in the company, as well who else might be liable for the company. You have to decide if you would like to have the company be yours only or if you want it to be run by others, even several people if you are going to do shares in the company (if you are unsure of the best structure for you then consult with your lawyer or accountant).
Before you completing the forms you are also going to have to decide on how you want to run the company. The basic options are Replaceable Rules, Constitution or combination of both (please note that Replaceable Rules are mainly for Public Companies and if you are purely going to run a small company that the Constitution is what the majority of companies registered will use, if you are unsure of the best structure for you then consult with your lawyer or accountant).
Next you will need all the following information to fill out your forms.
You will need your name as well as everyone else’s who will be taking part in the company. This means full names. This includes former names as well. You will also need the addresses as well as the dates and places of birth for each person too.
These addresses should include anyone that is going to play a role in running the company. This should also include the secretary of the proposed company, such as the person who will be taking care of the financial aspects of the company.
For those who will be part of the company as share holders you will need their names, addresses and the amount of shares they will hold in the company.
You will also need the proposed addresses of where the company is to be served documents, such as the mailing address, and the proposed address of the place of business of the company. Both of these addresses should be in Australia.
Once you have made all the proper decisions and have gathered all of the information you need to fill out the application you can sit down to begin your application and then submit it. You are able to do applications online as well as in person; this choice like many when it comes to your new business is up to you.
So in summary here is a list of what you need:
Your preferred company name
Principal Place of Business of the company
Occupier (if relevant)
– Full Name (no initials) of Officeholder
– Residential Address of Officeholder
– Date and Place of Birth
– Full Name (no initials) of Shareholder
– Address for Service
– How many shares, What the nominal value is of each share and class of share
Credit Card: We accept Visa and Master Card (This is done through Westpac Bank)
Bank Deposit: Some people prefer to pay via bank deposit. When using this we require the funds to be transferred into our account prior to incorporation
14 Day Account.If you are an accountant or solicitor and you incorporate on a regular basis then you can take advantage of our account service. (you will also be able to take advantage of The Companies Now Loyalty Program)
All ASIC documents prepared
Consent to act as a director
Consent to act as a Secretary
Coated tabbed index
Fully indexed minutes
Share certificates per share allocation
All of the above is inclusive in the price.
If you register or incorporate a new company in the the email version you will receive an email shortly after your order with all the files in a PDF file. You can receive this in as little as 20 minutes from completing the order form (sometime ASIC can take longer to process information).
Incorporate new companies online fast If you order the company with a Company Register you will also receive the information in a highly presentable folder (Company Register) and free overnight Australia wide delivery. You also receive 4 copies of the Constitution. The additional copies are used to open bank accounts etc. You also receive an ABN application pack.
If you order the company with a Company Register you will also receive the information in a highly presentable folder (Company Register) and free overnight Australia wide delivery. You also receive 4 copies of the Constitution. The additional copies are used to open bank accounts etc.
You also receive an ABN application pack.
For more information on incorporating companies in Australia or to order your company go to Register Companies
Company Name Queries
Pick three names
Typically, anyone who wishes to register a company will have to decide on a number of things that will constitute the details of a registration application.
Foremost is the choice of a name. ASIC has a huge number of company name reservations and registrations on file, and you will be denied the use of a name if it has already been registered, or if is similar to an existing or reserved company name.
So it is recommended that you think of at least three names that you would like to use for your company, and to list them in the order of preference. Try to keep them simple and use words that reflect the nature of your business.
It is possible, by using the ASIC online facilities, to verify the availability of the name you choose before proceeding with filing the registration application. Name verification is easy. Simply go to the ASIC website and type in the name you wish to verify in “Search ASIC Registers”. The other names you have listed will come in handy if an initial name search shows that another entity is already be using the same or similar name.
Reserve the available name
It’s best to reserve a name ahead of the actual filing of the ASIC registration, if for example, you feel that you need more time to complete the registration form or to come up with the required capital. By reserving the name you are preventing anyone else from either reserving it, or using it in another registration application. Name reservations are held for two months.
If, before the end of this 60 day period, you are still unable to complete the registration requirements, you can apply for an extension of the original reservation. If granted, a two month extension will apply. A good rule of thumb is to apply to extend the reservation one week before the original period expires.
There is a reservation fee (with ASIC) of $40 for the first two months, and another fee of $40 for the extension period.
Once you have reserved a company name, it can then be used in your application for company registration. However, despite the fact that you have reserved a name, it is not guaranteed that you will be able to use this name for company registration. It is possible that another company, with a prior registration, could object to your name, claiming it is too similar or confusingly similar to theirs.
ASIC reminds applicants to be prepared for any challenges regarding their reserved or registered company names – another good reason to have those other choices on standby.
CHECK TO SEE IF YOUR CHOSEN NAME IS AVAILABLE HERE
If you would like Companies Now to reserve the name for you then please visit our contact page or give us a call on 1300 658 934 and we will reserve the name on your behalf.
Of course finding the right professional to show you or aid you in how to register a company is not always an easy task. There are many businesses that offer to provide this service, although they may not offer you the experience or expertise others can provide. When you are looking for the best assistance to help you register a company you should seek a business that has length of experience in the business of how to register a company. This will provide you with the stability of experience and length of business life to aid you if any complications should occur.
In addition to experience in the field of how to register a company, you need to also seek a business that will provide you with step by step instruction to help you as you register a company. When you register a company it is a complex legal process that requires the touch of a professional but this does not mean you should not be aware of what it being done. Many companies will take your information and mail you a package when complete. Demand that you be involved in the process when you register a company so that you are aware of what is being done with your business. This will help you in the future should any questions arise regarding your company registration so that you have the knowledge to meet any challenge.
Finally, you should seek a company that guarantees your satisfaction when it comes to how to register a company. Many less reputable companies will aid you to register a company then when complications occur with the process, add new fees or demand additional payment to increase your cost. While these are shady tactics, most business owners submit to the increase in order to not stall the registration process.
Resource Box: When a business promises one hundred percent satisfaction when they register a company, you can feel confident to get the job done right with no hidden charges. To discover the best how to register a company business for you visit www.companiesnow.com.au/companiesnow_responsive
If you dream big, however, and foresee the growth of your business, then you may have to consider the advantages of establishing a limited proprietary company instead of being a sole trader. Here’s why.
A limited proprietary company is an incorporated entity. Its existence starts upon the issuance of the ACN by the Australian Securities and Investment Commission (or ASIC). As a juridical entity, existing corporation laws consider the limited proprietary company as a business set-up that is distinct and separate from that of the sole shareholder or member.
As such, the liabilities of your company do not become your personal liabilities. Your company’s creditors will not necessarily be your own creditors. This is particularly important when your business may one day hit a financial down cycle.
It is normal for businesses to experience rough spots. In the extreme case, a business may become insolvent, which occurs when the financial obligations of a business exceed assets.
If this should happen to you as a sole trader, you can expect a lot of pressure to pay coming from your creditors. As your business’s obligations fall due, your creditor will first try to collect from the single proprietorship. If any of your creditors pursue and win a legal action for collection against your business, your creditor will most likely look for properties in your name to satisfy his or her claim against you.
The most obvious ones that your creditor will go after are bank accounts under your name, shares of stock in your name, motor vehicle/s and even the roof over your head. This is because in the eyes of the law, a sole trader/single proprietorship and its owner or proprietor is one and the same person.
As the owner, you assume the financial risks of your business personally and can be made liable for them.
To avoid losing your home or other personal asset, your most logical choice should be to set up a limited proprietary company. All it takes to start a limited proprietary company is one shareholder. You need not take on any business partner if you feel that you can manage your growing business on your own.
With an incorporated company in place, you are now able to take financial risks for the company without fear of exposing your personal assets unnecessarily. Generally, a creditor who decides to run after your company for any unpaid obligation will have to satisfy his or her claim using the assets of your company, nothing more. Your car and your home are protected for as long as you do not execute a personal guarantee for your company’s obligations.
While creating a business as a sole trader may be easy, the economic benefits of setting up a limited proprietary company may make the hassle of registration with the Australian Securities and Investment Commission (or ASIC) well worth it.
If you are unsure of the security of your current situation it would be worthwhile speaking with your accountant or solicitor.
Or if go here to incorporate your business
While the ACN is issued by the ASIC, the ABN is issued by the Australian Business Register.
The ABN is an identification number that can be used to verify the details of your company. The information which you will provide as part of your ABN registration may be used to verify your company’s details which can in turn streamline communication with government agencies, e.g. the Taxation Department.
The public can also verify some of your company’s details online using the ABN Look Up. This service can also be useful to you in finding information on the companies with which you are dealing, for example correct name for invoicing.
When do you need an ABN?
Not all businesses with an ACN are required to obtain an ABN. There are instances, however, where an ABN becomes necessary, for example:
* If your business has an annual turnover of $75,000 or higher, then you are required to register for Goods and Services Tax (GST) and an ABN is required by Australian Taxation Office (ATO) for this. If your business has a turnover of less than $75,000, then registration for GST and ABN are optional. (However, by not registering for GST you are telling your clients/competition that your turnover is less than $75,000 – which you may not wish to divulge.)
* If your company is a non‐profit organization with an annual turnover of $150,000 or more, then you will need to register your company for GST purposes, and this requires an ABN.
* If you want your company to qualify as a gift deductible recipient or income tax exempt charity, then you will be required to obtain an ABN.
Advantages of the ABN
While getting an ABN is not an absolute requirement for companies, you may still wish to consider obtaining the ABN for your company’s purposes as it comes with the following advantages:
* It prevents other entities from deducting the pay‐as‐you‐go (PAYG) withholding tax from payments due to your company.
* It allows you to qualify for and claim energy grants credits.
* It provides easy identification for other business contacts to confirm your company’s details for ordering and invoicing purposes.
* The ABN generally makes it easier for your company to deal with the government and to conduct its business with other entities as well. It’s easy to apply for an ABN. All you need is an Internet access. There are no fees to be paid and your company ABN may be immediately released the moment you complete the ABN application process online using the Australian Business Register (ABR) website.
The power of a website cannot be underestimated, as world e‐commerce is on the upswing. E‐commerce observers predict that much of world trade will transpire online, and even local businesses, like e.g. a hardware store or cake shop, benefit from having their own website. True enough, statistics from various sources show that the number of Internet users continues to rise steadily, and these users turn to the web regularly for the following reasons to gain information, to develop a social network, to be entertained, and to shop online. Particularly if your company is in any of the following industries, you should most definitely establish your presence in cyberspace:
* Travel‐related businesses
* Book and music retailing
* Utility companies and
* Petroleum‐related businesses
While you can sell almost anything on the Internet, you stand a good chance of making a sale with the top selling items of computer hardware and software, information products like e‐books and tutorials, travel services, health and fitness products, cosmetics, books and music, clothing and toys. Admittedly, there are some things that are not being purchased online, and these are usually the big ticket items like luxury cars, high‐end jewelry, and brand new high fashion items. Most of the retailers of these items, however, still maintain very impressive websites as showrooms for their premium products. These sites generate a lot of views from potential buyers.
A website allows a client to look at and study your products online before deciding to buy something at your nearest outlet. There are also companies with websites even when their businesses do not involve any retail activity. If you are not in the retail trade, you may still use your website to provide comprehensive information about your company and its business.
An informative website may also be the starting point for business relationships especially if contact information like an email address is published on the site. There are other activities that your company may conduct online in connection with its business, such as:
* Market research
* Public relations
* Customer service
* Product information
* Product promotion
* Media relations
* Technical service
* Intracompany communications
You should consider what the average Internet user is like before designing your website and choosing what products or services to offer online. Here are some of the more common characteristics of web users:
* They are young and between the ages of 25‐ 44 years old.
* They are educated, affluent or well‐paid.
* They prefer to spend time surfing the Net than watching TV.
* They communicate by email and by phone.
* Much of their spare time is spent browsing through websites.
So, whether your goal is to generate interest in your new company or to conduct sales of your products online, you can only benefit by having a website.
You may also be interested to read should my company name be the same as my domain name.
In Internet parlance, a domain name is also known as a URL or Uniform Resource Locator. Typically, a domain name will look like this: http://www.yourcompanyname.com.au.
Obtaining a domain name is your first step to conducting your business online. By having a website, you have a vehicle through which you can buy or sell products to anyone connected to the Internet, anywhere in the world. It is now becoming expected for businesses to have a domain name and a website.
It is a good idea to have at least a small website in your company name if only to guard its integrity. It’s not enough to just obtain the domain name, as a challenger to the name can point to the fact that it not being used in an attempt to wrestle its ownership from you. Whether you register several other domain names, one for each area of your business, or for each of your ‘brand’ names, is optional, but recommended for the same reason. Grab the names before someone else does.
An important feature of owning a domain name that is the same, or as close as possible, to your company name is the ability to use that domain name as part of your company email address/addresses. This contributes greatly to the professional and business image of your company, projecting it in a credible light.
You should be careful with the choice of a company name (if choosing a new one) and its corresponding domain name. Over the years, legal disputes have arisen out of the use of domain names and company names that are identical to existing registered trademarks or company names.
What’s more, names that could be the subject of an infringement action need not be ones that are locally registered here in Australia. Most world famous names and marks have international protection against intellectual property infringement that may be enforced against anyone in almost every country.
ASIC (Australian Securities and Investment Commission) recommends that your choice of a domain name is not identical, similar or confusingly similar to an existing business name, company name, reserved company name or registered trademark.
You can avoid legal conflict by conducting a domain name search on the Internet and a name search on an Australian domain registration website prior to reserving a company name for your business. If, after conducting a thorough search, the proposed name for your company is free for use, then go ahead and apply for it as your company name.
Should you have an existing business and find that its name has already been used by someone else for their website, it will be necessary to look for an alternative that either modifies the business name, or successfully interprets the nature of your business.
Once you register your domain name, no one else can hold or use the same Internet address simultaneously.
Now you might think that just because the company gets closed for non payment of taxes the company would be relieved of having to pay, but this is not true. The money is a bill that is basically past due. Think of a phone service or television. When not paid things get turned off, and you still owe the back pay, and then some late fees to get caught up. In addition you might have to pay to get things turned back on.
In the case where the company is closed, it might take auctioning off the company assets and such in order to solve the debt to the government. Not only this, but think of all the lost business from not being in service. Usually much more money will be lost this way, than if the taxes are just paid on time.
In addition to the company being closed the government then has the right to go after the director of the company for the tax money. As the director of the company, you have the obligation to make sure the company is following all of the laws of being in business and one of these laws is to pay taxes.
There has actually been a recent case where the director of the company did not take matters into their owns hands and make sure the taxes were paid. He did have a few defences such as not being in charge the entire time and acting honestly on behalf of the company, but an appeals court agreed with the government that he should be the one to pay the back taxes of over $100,000. Originally he had won the case.
In this case the defendant Mr. Dick was an honest director but he did not do his due diligence into making sure everything was reported and taken care of as the ASIC would like it to be. He did assume things such as the new CEO was the director that were not true, and this in the end caused him to lose the appealed case.
It is imperative to remember that as the director of a company you are in charge of several things. You actually have to make sure the business is run by the rules (laws) and that everything is taken care of according to the ASIC and the government. If changes occur while you are the director of the company you should make sure they are reported, and if you step down as the director you should also make sure it is reported to save you from situations such as non payment of taxes.
As the secretary of your company, it is your obligation to contact the ASIC. Now depending on the size of your company, the secretary and the director may be the same person. That’s ok, just keep in mind for any big changes, such as adding share holders and such, you have to keep your public records through ASIC updated.
When you decide to add a share holder or a new partner there are other things you should keep in mind. First you might want to get some legal advice. Of course by adding either of these two positions to your company you would need to make some agreements. Just be sure you are going into the change with your eyes wide open.
Once you have everything in place and you are at the point where it will all be official you will have to contact ASIC to update things. You can use the information from their website about adding people. There is a form to fill out for each person, you have to include their name, maiden name, birth city, address, and contact information. Once you have it all filled out you can mail it to ASIC.
The form is called the 484 Form and it is used for almost any changes in the company. You can use it to change addresses, names of officers, appointing new officeholders, or when you lose a shareholder. You can also use it to issue shares of the company, cancel shares, change the structure of the company shares, and more.
You will have up to 28 days after the event to lodge the form. During this time there is no charge for filing the form. After the 28 days, you will be charged $65 for it being up to 30 days late and $270 for it being more than a month late.
If you are registered online as an officer you can fill out the form and lodge it that way. This is a lot easier to make changes than printing out the forms and sending in the mail, and it saves the chances of anything getting lost in the mail, which could cause some charges for being lodged late.
When making changes to your company there is just one other thing to keep in mind. Everything that you needed when you first registered is still needed to continue business. That means if you had separate office holders such as the secretary and the director and the secretary steps down, you have to register yourself as the director. It is not automatically assumed by the ASIC.
No matter what changes you make in your company it is important to make sure they are legal as far as the ASIC goes, and as long as you are within their standards you are welcome to continue business, just keep them updated, and most of the time you can use form 484 for informational changes. Or you can use the company that registered your company to assist you in this process.
To get started you need to decide how you want to register. You can just register a name or you can register a company. Once you make that decision there are a few more to make as well. You have to choose a name, and then decide what set of rules you are going to run your business by.
On top of all of these things you must then choose at least one director and one secretary of your business. This is actually part of registering the business. The director and the secretary can be the same person. The director makes sure things in the business are run within the rules chosen when you register, as well as paying taxes. The secretary takes care of making sure the paper work and other information is taken care of, such as changes in the business that need to be lodged with the ASIC.
Once you have your business running you still have to follow the rules of the ASIC, and you have to get yearly dues paid to the ASIC as well. For instance if there are any changes within your company like the office holders, people changing names (ex: marriage, divorce) or more people are appointed as stock holders you have to notify the ASIC usually within 28 days. If you don’t you can face late fees of up to $270.
A large part of correctly running a business is keeping within standards of the ASIC. They have several rules that must be adhered to by the director and secretary in order for the business to stay in good standings.
As a company you also have a responsibility to your customers to be an upstanding business because many may rely on your services or products for their own livelihood.
Paying your taxes on time is another part of running your business correctly. If you fail to pay your taxes you can either end up having your company shut down, or the director of the company may have to pay the taxes themselves.
Although having a business means you aren’t liable for more than what the business has, the case is different when it comes to the director and taxes not being paid. It is a main responsibility of the director to have the taxes paid on time and if they do not take care to have this done they can be personally liable.
When you first register your company with the ASIC you will receive a lot of information about laws and rules you must follow. It is best that you keep track of this information and check it periodically to make sure you are within guidelines, that way you will always be sure the business is being correctly run.
It seems small business didn’t get much out of the new federal budget. While they would have liked to have seen more tax cuts to help with the growing costs of doing business the government has delivered very little. In fact the new budget is going to approximately put $50-$90 a week back into the small business pockets which falls very short of the cost incurred with gas and cost of living prices going up.
The budget was expected to give more tax breaks because gas prices as well as food and other costs of doing business have increased quite a bit and small businesses are losing a lot of money because of the prices. On top of these prices there are always taxes to pay, and that is where the small businesses of Australia were hoping to get a little help.
Because they did not get the break they expected or needed, it is predicted that there are going to be less jobs for working families. The reason behind this is, small businesses just don’t have the money to keep so many people employed, that means job cuts and a higher unemployment rate for the country. Additionally it might mean more work for the already employed people, on the same or slightly higher rate, if the company can afford it.
There is some good news though. For instance the Agriculture Advancing Australia program got $205mn for the next four years. This money is to help with changes in the farming industry as well as help farmers out who want to exit the industry.
$49mn has been allocated for a better integrated online registration system for the ABN (Australian Business Numbers) and business names. And another $14.3 was allocated for the Building Entrepreneurship in Small Business program where people are learning and can teach others skills for starting their own business.
There was also another $370mn that was allocated to help with the costs of GST collections, this will be used over the next 4 years.
While small business owners are not impressed with the small tax cut and other benefits they have received with the new federal budget the small changes will help. In the end though it is going to take a lot more in tax cuts to keep working families working and small businesses open, especially if prices continue to increase.
There is a little less than another year left to make sure your voice as a small business is heard, you can contact your government representative to give them your opinion and let them know what would help your small business best.
Until then the $50-$90 tax cut should start showing up weekly starting next year.
Additionally once you are doing business all over Australia you might want to consider doing business around the world as well. Here is where you are going to encounter more red tape, so to speak, and there will be rules, laws and other regulations you will have to take into consideration before you take the leap and become international.
Depending on your business you should consult with a legal team and find out what regulations there are when it comes to the kind of business you run. If for example you run a business where you produce and sell goods you will have to deal with importing and exporting of your product. There are laws which tell you what exactly you are able to sell and what you can not. On top of this there are certain taxes, levies and other fees you might have to pay, based on your product.
Each country you want to trade with, will as well have their own laws too. The United States and China in specific have many laws, and China is a huge exporter.
As an international company you will be working even more closely with ASIC (Australian Securities Investment Commission). They will make sure you are following all of the right regulations in order to do business around the world.
When you become particularly interested in working on a more international level, it would be best to contact the ASIC team to see what your company has to do. The office at ASIC you should contact is the Office of International Relations. They work closely with companies all over the world that are interested in working with Australian companies. They help the companies in Australia follow the laws of other nations while the importers and exporters of other nations are following Australian laws as well.
Again, depending on the type of business you run, you might have forms to fill out, licenses to purchase, inspections to get and other fees to pay, in order to go international.
While getting started in Australia as your own company may at first seem like a big step there is a lot of potential for growth. You might first start out in your own city, your own state, and then Australia as a whole, soon enough though you could be considering going international. As long as you are willing to work with the ASIC on this, you will have a lot of room to grow, as the world is just full of opportunities for you and your company.
So explore all the avenues you can in order for the potential expansion of your business growth.
Violating the Corporation Act potentially means trouble for the director of the company. You see when you are the director of the company you are have to make sure the company follows all applicable laws. In addition if there are share holders or creditors you also have duties to them as well to make sure things in the company are going well for them. That means you have to make sure everyone’s interests are protected.
As the director if you don’t do this you aren’t in compliance with the Corporation Act and you could become personally liable for the company’s debts, especially if you they go bankrupt. What happens is the ASIC can charge you compensation proceedings that equal the amount the creditors lost. Additionally there can be a charge of up to $200,000 just for violating the Corporation Act.
If as the director you do your part to make sure everyones’ interests are protected, you stay on top of what is happening financially with the company and creditors and you act honestly as the director you might be able to use this as a defense in order to not have to pay the civil and proceedings charges.
On top of this the director might also be held personally accountable if taxes of the company are not paid. If the company does not pay the taxes the government comes after the company, but if there is nothing to get from the company they can actually make the director liable because he did not do his job and make sure the company was paying all their bills, including their taxes.
In conclusion if you are a director there are a few things you can do to protect yourself. First you must always be sure to act honestly on behalf of the company and everyone who has interests in the company. On top of that, make sure the company can always pay their bills and their taxes, and if there are any problems, be sure to get financial and legal advice. If you believe that the company is near insolvent or is insolvent, stop trading so that you do not violate any laws. From this point consult further with someone on your financial situation do what is in the best interest of everyone.
One last note, if you as the director ever become bankrupt you must appoint someone new as the director, a director is not allowed to act if they have received a personal bankrupt.
While you could probably go and get some small business loans as one option there is another. You might want to try investors instead. The difference is with investors is you will be able to negotiate with them more. You might be able to get the money up front and start paying them back once the project is done. This will give you more time where you don’t have to make payments until you have the extra money to.
One problem companies seem to have when they have an idea for a new project is they need the money to back them for it. It isn’t always easy to get investors interested in your ideas, especially if it costs a lot of money. And the more money you need, the more convincing they need.
Here are some things to keep in mind when trying to get investors interested in helping you out.
Do your research. Take the time to see what people are buying, why they would buy your product or service and who would buy it. That means get information about demographics. The more research you have to back up your claims to the investor the better.
Realistic results. From the researching you should be able to show them realistic results of your project. In addition to this, show them what they can make back from their investment. The more they can make back the better.
Longevity. Not necessarily the longevity of the product but of the customer cycle. Are the customers going to buy just once, or will the customer buy repeatedly. This is also a good place to introduce products based off this project. The longer this projects affects business (in a good way) the more interested investors will be.
Unique Selling Point. You have to be creative enough to come up with a specific reason people are going to buy your product and not go with a competitor. A good way to do this is to choose a unique selling point, basically this means what are you offering that others don’t? The better your USP is the more customers and investors you will get.
It still can be a little difficult to get investors and that might be because investors like to specialize in the areas of business they will invest. The reason is they like to know as much as they can about the industries they enter. For this reason you have to just keep trying and eventually you will find investors that are interested in helping you, as long as you follow the tips above.
When you registered as a business, you got the right to run business practices under the name you chose for your business. Basically just being able to use that name is all you got out of registering.
If you consider registering as a company you will realize there is a lot more you can do. As a company you only have to register the business name you choose once in Australia. With a business you have to register the name with each state you choose to do business in. That makes for some time consuming paper work, especially as you grow and add more and more clientèle to your business.
Another benefit to registering as a company instead of a business is you will seem a lot more serious about your business this way. It can be pretty expensive to register a company and keep up with the fees for running it as a company. When you do it this way though you will show you are more vested and serious about your business than just paying the nominal business name registration fee.
Investors are more likely to want to work with you if you are a company rather than a business too. The reason is they don’t want to be any more liable than they have to be and when they see how serious you are about your business they will be more likely to lend you the money you need for your current projects.
One other benefit that you might really enjoy about having a company compared to having a registered business name is the liability you will have. As a company you are able to have less liability and the company is responsible for itself. You are vested personally in wanting this company to succeed of course, but as a company your assets are safe. If you ever have to go bankrupt all of your personal assets should be fine, but the company assets will be sold to cover debts.
You see having a company compared to having a business name means a lot of differences in how you do business, and possibly how well your business will do. If you truly want what is best for your business, step up to the plate and show how dedicated and serious you are about running your business by registering as a company today. You business’s future may depend on it.
How serious are you about your business? How serious do you want others to think you are?
If you are very serious about your business and what others think about your business you might want to register as a company to show that. It costs time and money to register as a company and by doing so you can prove to others just serious you are about your business.
Do you want more options for your business?
As you grow you might be interested to know that when you register as a company you get the following bonuses:
Tax Cut: Depending on what you are making with your business you could receive a large tax break. As a company you will only be taxed 30% instead of up to 46.5% that can be charged to citizens.
Limited Liability Bonus: When you own a company you can own land, and assets in the name of the company, as well as loans, and more. This means if you ever have a problem with the company and paying the bills, your personal money is not at stake. This means your home, and other assets that belong to you. All assets that are owned by the company can be used to pay off debts but not your belongings.
More Investors Bonus: Because you are not looking for partners to go into business with, investors might find you a better fit to work with and lend money to. This is because you have taken the steps to become a company and there is a lot less liability on them than if you were going to become partners.
Back to the questions:
Do you have the money to invest to register as a company?
The costs can vary when you register as a company but the price is much more than if you were to just register a business name. There are also on going costs of being registered as a company that you have to take into account. The prices can be from $527 to register as a company and up.
Do you ever plan to sell?
If you want to be able to sell your business you have to have it registered as a company first. There is too much hassle any other way and when you sell you will most likely want your name off the business. The only way to do this is by having the business as a company.
You can see there is a lot to take into consideration when you are thinking about whether you want to register as a company or not. You should take the time to consult with tax and legal advisers before you make a decision one way or the other.
All of these options have their pros and cons, and ASIC’s website has a lot of information on how to make these decisions. You will find information on starting and running your registered business.
Once you have all of this information you then need to gather the information to register your company. You will then fill out the appropriate forms, and send to a registered agent such as Companies Now or directly to ASIC (this is more time consuming and you personally have to go into the ASIC offices to complete).
Since the Internet has become so available and easy to use ASIC has made registering your business a lot faster and easier through there Registered agents with the option to register online. Registered agents like Companies Now are also there to help you with the process and take the hassle out of starting your new company.
Once you get the Certificate of Registration you can then be able to go into business and start doing things for your company. You can hire people, get investors, set up bank accounts and start offering your service and/ or products to the public.
This however does not mean you are done with ASIC there are still things you need to do to upkeep your business.
For instance when you registered you appointed directors, and secretaries. If these ever change you have to notify ASIC. The secretary of your company will probably very often be in contact with ASIC because it will be their job to keep ASIC notified of any changes in the company.
You also have to advice of any changes of address to ASIC and it is important that this is done in a timely manner otherwise you can incur fines for late notice of changes.
You will also have to pay certain fees to ASIC such as yearly dues on your business. ASIC can contact your business at any time to make sure you are following all of the rules of being listed in ASIC business directory, as a legal company of Australia. The rules you have to follow will vary based on what structure and the constitution or replaceable rules you decided to use when you signed up.
Just remember to make any changes valid by contacting and registering the changes with ASIC. As long as you are always working with ASIC to keep your business running legitimately there is no reason to worry about having any problems and you should continue to run smoothly.
In Australia being incorporated is called being a proprietary company. This is actually considered a corporation and there are some limitations to having this kind of corporation. One of these limitations is you can not have more than 50 shareholders in the company. This means you have to be careful who you sell shares to so that you do not go over this limit.
Another limitation is the fact that the shares can not be offered to the public, but must sometimes use a prospectus to raise funds. There are other restrictions that a Pty. Ltd. corporation must adhere to as well; you should consult with your legal advisers before deciding for sure if you want to be a limited corporation.
Stockholders like to invest into companies this way because they can easily put in a little money and experience great growth. You might be interested in incorporating your company because you can easily get a great amount of money invested into your company that you can use as capital to make more money off the company.
If you have big projects coming up that you want to use to grow your company and make much more money than you have before this might be a great option as it will be attractive to investors.
One important part of being an incorporated company is that you have to sell shares (you can be the sole share holder as well though). This has its pros and cons of course. When you sell shares you can in fact lose your interest in the company. Meaning if you don’t hold over 51% of the shares you can actually be out voted when big decisions are being made. That is if everyone votes against you so make sure you are confident in how you have structured your share holding.
A good thing about being incorporated is that you and the stock holders have a lot less liability in the company. In a limited corporation you usually have unlimited liability which means the most you can usually lose is your initial investment into the company.
This means if you start out by investing into the company with 1.5 million dollars and it grows to 6 million dollars but then the company goes bankrupt you will lose all that is invested. If you in fact cash out before the bankruptcy then you would get close to $6 million (minus any taxes, of course). Still though you only invested the 1.5 million so that is all you are considered to have lost.
The protection of a limited company in Australia really depends on how much you, as an investor, front to the corporation. In most cases this is all you can lose by investing in the company, and you will not have to worry about any of your personal assets if the company goes south.
Again seek legal advice on if this structure is the best for you.
You will receiver your ACN either via fax or email within 30 minutes of registration (sometimes this may take longer if there is a hold up with ASIC), and once you do you can start using it.
Apply for an ABN number:
Even if you become a company you still need and ABN (below is an extract from ASIC’s website):
ABN = Australian Business Number
This is a new number for business dealings with the ATO (Australian Tax Office) and in future, with government agencies at all levels. An ABN is needed to register for GST and other elements of the New Tax System.
So it is essential that all companies apply for one. You can apply either by completing the order form that is provided when you purchase the complete company register or online at http://www.abr.gov.au/ABR_BC/ (currently does not support internet browsers other than Microsoft Internet Explorer Version 5.0 or later & Netscape Navigator/Communicator Version 6.0 or later)
Get Your Domain Name:
In todays day and age it is important to have a website in fact I would go as far to say you are “playing” if you do not plan on having one and fast.
Websites are now very affordable and can be set up for as little as a few hundred dollars. And for the power of what the internet can offer it is a great marketing tool.
So you will need to start with a Domain Name (this is the address that people will enter to go to your website ie: www.companiesnow.com.au/companiesnow_responsive) It is a good idea to have the domain name closely linked to what it is you do. Example: Company Name: Hair Excellence Web: www.hairexcellence.com.au. If you cannot get that exact match play around to get as close as possible.
If you are doing business all around the world then go for a .com domain name but if you are mainly dealing in Australia go for a .com.au as people will relate to you being an Australian Business.
A public officer must be appointed within 3 months of the company commencing to carry on business or first deriving income in Australia.
The public officer must be a natural person of at least 18 years if age and must also be an ‘ordinary resident’ in Australia.
The public officer is answerable for everything that is required to be done by the company for tax-related purposes and, if in default, is liable to the same penalties. The public officer is not, however, personally liable for payment of tax due by the company.
To find out about more requirements of the Public Officer click here.