Introduction
Startups, technology companies and large businesses alike are attracted to the business opportunities that Australia presents. Companies who have chosen Australia as the next location on their global expansion journey will need to manage the process of establishing a local company. This Australia company incorporation guide serves as an introduction to common considerations and steps.
Company Types
Foreign companies planning to establish a presence in Australia can choose between setting up a branch office, subsidiary and representative office. The most common type of entity is a proprietary limited company.
- Proprietary Company: Under Australian law, a proprietary limited company (abbreviated as ‘Pty Ltd’) is a business structure that has at least one shareholder and no more than 50 non-employee shareholders, where the liability of shareholders is limited to the value of shares. The company must have at least one director who is resident in Australia, and there are restrictions on the company’s ability to raise funding from the public. Proprietary limited companies are the most common type of company registered in Australia.
- Branch: If not wishing to incorporate an Australian Company, a foreign company “carrying on business” in Australia must still register. The process is similar to establishing an Australian company. Once registered, the foreign company may sue and be sued or may hold property in the name of its secretary or other officer. Branch offices will only be taxed on income deemed to be Australian sourced.
- Rep Office: Where a foreign company does not intend to carry on business in Australia it may seek to establish a representative office. Such an office must however only engage in activities which will not amount to carrying on business (for example, undertaking promotional activities). If the representative office engages in activities other than those which would not amount to carrying on business, an Australian branch must be registered.
Incorporation Requirements
Paid Up capital: Each shareholder contributes capital to the company by subscribing and paying for shares. There are no minimum capital requirements. The paid up capital can be as little as A$1.00.
Foreign Percentage Ownership: An Australian company only requires one shareholder. This can include a person living overseas. The member must file the registration form with ASIC.
Local Director: A Branch is not required to have a local director, but a registered foreign company must have 1 local agent. A Proprietary company must have at least 1 director, and at least 1 director must ordinarily reside in Australia.
Corporate Secretary: Proprietary company is not required to have a company secretary, but if a company has 1 or more, at least 1 of them must ordinarily reside in Australia. Corporate secretaries are common in practice.
Office: Must have a registered office in Australia. This does not have to be owned or leased by the company, but the person who owns or leases that property must consent to it being the registered office of the company. Corporate records are generally required to be maintained at the registered office. The provision of a local registered address by a law firm for third party service provider is allowed.
Complete Legal Paperwork
In order to register a company a legal firm, corporate secretary or corporate service provider will assist with the preparation of company incorporation paperwork. This will include articles of incorporation, constitution, first AGM meeting, share certificate, member consent forms, consent to act as director and other legal documents to support the incorporation. The provider will then continue to manage any new company resolutions that are required over the course of the company lifecycle.
Documents
The following documents are required for company registration in Australia:
- Application Form ( Form 201)
- Name Reservation
- Constitution of Company or Replaceable Rules
- Form 410 – For reserving the name
- Information on the shareholders and directors
- Information on Registered Office Address.
- Valid IDs of the incorporators, directors and officers
- Proof of the registered official address in the form of a contract of lease or certificate of land title
Company Incorporation
Upon execution of legal paperwork, the service provider engaged will provide a copy of the official certificate of incorporation issued by ASIC (Australian Securities and Investment Commission). In Australia, ASIC maintains a system of corporate records via an online platform that can be accessed by directors or your corporate secretary. The ASIC profile will include a ABN (Australia Business Number) and ACN (Australia Company Number) which is used for a number of the following registrations.
File Mandatory Registrations
Once the company has completed the legal paperwork, registered the company and is provided a ABN number then they can begin the process of registering with the required agencies. In Australia these include:
- ACN: Australia Company Number
- ATO: Australia Tax Office
- PAYG: Income tax deductions
- GST
- Superannuation
- Payroll Tax
- Workers Compensation
Setup Bank Account
The final step is to decide the bank to work with. Australia has a highly developed banking infrastructure that startups and hyper growth companies alike benefit from. The process of establishing a bank account can be an unexpectedly long process that many companies do not sufficiently plan for. This can include extensive application documents, notarized director documents, KYC documentation and in person signatures. Common local banks in Australia include ANZ, Commonwealth Bank, NAB, and Westpac Bank.
