A company is a business structure set up and financed by a group of people and or legal entities to engage in commercial activities within a territory as stated in its bylaws, of which profits and losses shall be shared amongst the shareholders. The common kind of entities permitted to exist in the country are the Privately Owned Company (Pty Ltd Company) and Trading Trusts. The registration of th6654e privately owned business is backed by the Corporations Act 2001 (Cth) (Corporations Act). A Private Ltd Company is a legal entity with a legal personality and no maximum time of existence. The major governing body of a Private Ltd Company is the Australian Securities and Investments Commission (ASIC). Its shareholders are not liable for the debts and liabilities of the entity, except to the extent of their paid shares. It can only have at most 50 non-employee shareholders during its existence. When foreign companies acquire assets or shares in a Pty Ltd entity, the process is subject to approval from the Foreign Investment Review Board, based on the nature and size of the business.
For those looking to set up a private entity in this country or foreign entities thinking of expanding here, this is a guide on the registration of privately owned companies in Australia and the process of incorporation.
Features of the company
Registering this entity takes at least one shareholder, who may or may not be domiciled in the country or a nation. It must, however, have no less than one director at the point of incorporation residing within the territory. Although the business has to issue one share at least, the minimum capital required is $0.01. A trading Pty Ltd Company requires a Tax File Number and Australian Business Number issued by the Australian Taxation Office. The nature and size of the business usually determine if the company has to register for GST. The purpose of the business is not required to be stated in the constitution.
The process of incorporation
The Australian Securities and Investments Commission has a public database containing certain details of every company in the country, which is why registration of a company before commencing commercial activities is compulsory. The process of incorporating includes registering the entity name with the ASIC and for taxes with the Australian Taxation Office. Involving the notary, company register, and governmental authorities for document notarization comes next. A lawyer or accountant can be hired to assist with the incorporation process if needed.
Note that a Pty Ltd Company may choose to adopt a constitution and if there is none, it will be governed by the amendable rules in the Corporations Act.
Information to be provided during the incorporation
The information about the entity listed below has to be made public during the process:
- Address of registered office
- Address or the location of the business
- Details of current and past directors and secretaries
- Details of new and old shareholders
- Amount of share capital
- Financial reports
- Present status of the Pty Ltd Company
Note that liens and encumbrances are registered on a different public database, the Personal Property Securities Register.
Timeline of the process
The process has no waiting period. After all the relevant information has been provided such as the name of the company, and details of the director and shareholders, it takes a business day to incorporate the Pty Ltd company.
Cost of the process
The fees incurred during the incorporation are the fees for professional service firms engaged to assist with the incorporation if any, and the lodgment fees with ASIC usually below AU$1,000.
