• What is a Company?

    At law a company has a separate legal existence from that of its owners, directors, managers, employees and agents.

    A company can:

        own and dispose of property and assets

        enter into contracts

        sue and be sued

    Shareholders of companies (limited by shares) own a company (through their ownership of shares) while the company is managed by the directors.

    Shareholders of a company (limited by shares) are not generally liable for the debts of that company.

    This concept of separate legal personality is often what attracts people to conduct business through a company.

  • Types of companies

    A proprietary company limited by shares is generally the most appropriate company structure for a small business. Non-employee shareholders are limited to 50. This type of company cannot trade on the stock exchange and cannot engage in a business activity requiring a prospectus.

    A public company limited by shares may offer its shares to the general public and can be listed on the stock exchange. Its membership is unlimited (unlike a proprietary company membership which is limited to 50). It must have the word 'Limited' or 'Ltd' at the end of the company name, unless authority has been obtained from ASIC- for example an unlimited public company

    A public company limited by guarantee does not have share capital, with members’ liability limited to the amount of the guarantee (usually a nominal amount). It must not distribute income to its members. This type of company is common for non-profit organisations – e.g. non-trading charities, sports organisations, industry bodies - as a range of tax concessions are available to eligible entities.

    A public company must have a minimum of three directors (as opposed to one for a proprietary company ), must hold an Annual General Meeting (AGM), must appoint an auditor (with the resignation of the auditor requiring consent of ASIC) and directors must not be present or vote on a matter in which they have a material personal interest

    A special purpose company is one that is created for a specific purpose. For example: a superannuation fund trustee company is a 'sole purpose' company with the sole purpose to act as a trustee of a regulated superannuation fund, so the company's constitution must prohibit the company from distributing income or property to its members.

    A company for a charitable purpose is similar to a proprietary company limited by shares except that there is no entitlement to dividends and all income / profits are to be applied in promoting the charitable purpose of the company. Members have no rights to participate in the distribution of assets on winding up. Any remaining assets are to be distributed to another charity.

  • Guidelines to set up a company

    Before you set up a company you need to decide which business structure best suits your needs and seek legal or other professional advice about your circumstances.

    All new companies established in Australia need to be incorporated with ASIC. At the time of incorporation, each new company is issued a unique Australian Company Number (ACN) by ASIC. Details regarding the establishment of the company are to be formalised by minutes and resolutions which are to meet requirements of the Corporations Act 2001 (Cth).

    To register a new company in Australia is easy using CompanyDocs

    You will need to:

    Check the availability of the name of the new company

    Provide company details, preview and confirm

    Pay by credit card and submit


    When a new company is registered, it can conduct business throughout Australia. There is no need to register the company in individual states and territories.

    Registering a business name is not the same as registering a company. Registration or use of a business name does not provide you with an entity of the limited liability protection which comes with registering a company. A business name is typically registered for business structures involving a sole trader or partnership.

    • create a legal entity - only registering a company creates a legal entity
    • allow the use of privileges to which a company is entitled, such as a corporate tax rate or limited liability.
  • Choosing a company name

    You can only choose a company name that is not already registered to a company or business. Certain words and phrases cannot be used in company names without the approval of a specified minister or government agency.

    In processing applications for reservation or registration of company names, only the following characters are acceptable in the proposed company name. The following characters are regarded as significant when determining whether a proposed name is available or not : Alphabetic characters A to Z ; Numeric characters 0 to 9 ; Asterisk * ; At ; Dollar $ ; Equals = ; Hash # ; Percent %

    The following characters are regarded as punctuation, and are not taken into account when determining the availability of a proposed name: Full Stop . ; Comma ,; Hyphen - ; Round Brackets ( ) ; Curled Brackets { } ; Exclamation Mark ! ; Question Mark ?; Colon : ; Semi-colon ; Apostrophe '; Quotation Marks " "; Underscore _ ; Slash / ; Pipe | ; Backslash \ ; Space

    Words that cannot be used in a company name include 'building society', 'trust', 'university', 'chamber of commerce' and 'chartered'. You also cannot use words which suggest a connection with government, the Royal Family or an ex-servicemen's organisation.

    ASIC may also refuse to register certain names if they are considered offensive or suggest illegal activity. Click here to check whether your proposed name is identical or similar to another name already registered.

    The company name can be its Australian Company number (ACN) which is the unique number ASIC gives on the registration of a new company.

    A company must display its name prominently at every place at which the company carries on business that is open to the public.

    To check ASIC’s records for name availability, click here

  • Australian Company Number (ACN)

    When a company is registered with ASIC it is provided with a unique 9 digit number, called an Australian Company Number (or ACN). The ACN is a corporate reference number only and is different from an ABN (see below) which is a business identification number for tax purposes.

    If the company then applies for an Australian Business Number (ABN), which is used by the Australian Tax Office as its reference number, the ABN allocated to the company should finish with the company’s nine-digit ACN. The company must quote its ABN on tax invoices.

    The company name and ACN or ABN must appear on:

      Every public document issued, signed or published by, or on behalf of, the company;

      Every eligible negotiable instrument issued, signed or published by, or on behalf of, the company, and

      All documents required to be lodged with ASIC under the Corporations Act 2001 (Cth).

  • Company Constitution

    A company's internal management may be governed by the provisions of the Corporations Act 2001 (Cth) and its constitution.

    The constitution has the effect of a contract between:

    the company and each member

    the company and each director

    the company and each company secretary

    a member and each other member.

    A company adopts a constitution on registration. Each person specified in the registration application as a person who consents to become a member, must agree in writing to the terms of the constitution.

    The key areas covered in a constitution for a company (limited by shares) include:

    Company's powers and restrictions

    Shares in the Company

    Transfer & transmission of shares

    Loans to Members

    Dividends & Reserves

    Capitalisation of profits

    Directors' powers, dealings & delegates

    Appointment, removal & resignation of Directors

    Remuneration of Directors

    Managing Director & Executive Officers (as applicable)

    Alternate Directors

    Directors' meetings & resolutions

    Directors' interests

    Members' meetings resolutions

    Corporate secretarial matters

    Winding up

    Indemnity & Insurance

    Notices.


    The constitution of a proprietary company must be kept with the company's records and made available if required. A company must provide an up-to-date copy of the constitution to any member who requests it within 7 days.

  • Legal obligations

    Officeholders

    A director and secretary, as officeholders of the company, remain ultimately responsible for the company's compliance with the Corporations Act 2001 (Cth).

    You should only be a company director or a company secretary if you are willing, able and have enough time to put in the effort required to run the business of the company. Before applying to register a company, written consent is required from people who agree to fill the roles of:

    director ( must be a person who is 18 years or older)

    secretary ( must be a person who is 18 years or older), and

    member (every company must have at least one member).

    A proprietary company must have at least one director. A public company must have a minimum of three directors. Unlike a public company, A proprietary company does not need to have a secretary. At least one director (and secretary, if any) of a proprietary company, must ordinarily reside in Australia. At least two directors of a public company must reside in Australia. The company's constitution sets out the directors' and secretary's powers and functions

    Directors control the company's business. In carrying out their duties a director, must:

    be honest and careful in their dealings at all times

    know what the company is doing

    take extra care when handling other people's money

    make sure that the company can pay its debts on time

    maintain proper financial records

    act in the company's best interests

    use information obtained through their position to gain, directly or indirectly, an advantage for themselves or for any other person, or to harm the company

    disclose personal interests that may conflict with their duty as a director.


    Officeholder duties also apply to company secretaries.

    Company Name & ACN

    All company officers must make sure that the company attends to some basic ‘housekeeping’ matters. The directors remain ultimately responsible for the company’s compliance with the Corporations Act 2001 (Cth).

    When a company is set up, you must:

    register your company name with ASIC and obtain an Australian Company Number (ACN)

    have a registered office and, if your company doesn’t occupy the same address as the registered office, then you must have written consent from the person who occupies the registered office.

    Make sure that you:

    display the company name at every place at which your company carries on business and that is open to the public..

    display the company name, the words ‘Australian Company Number’ (or ‘ACN’) or ‘Australian Business Number’ (or ‘ABN’) and the relevant number on:

        the common seal (if the company has one)

        every public document of the company

        every negotiable instrument (e.g. cheque, promissory note ) of the company, and

        all documents lodged with ASIC.

    Registers

    Your company must keep:

        register of members or shareholders (as applicable)

        register of option holders (if you have them)

        register of debenture holders (if you have them)

        minutes/resolutions of general meetings

        minutes/resolutions of meetings of directors and

        financial records that enable an assessment of the company’s financial position and performance and are sufficient for financial statements to be prepared (and audited if necessary) for at least seven years after the transactions are completed.

  • Company documentation package

    Each company registration through MYOB CompanyDocs is accompanied by a Company Formation Package, which consists of high quality legal documents provided by top 20 legal firm, Sparke Helmore.

    These documents consist of:

    ASIC Certificate

    Copy of ASIC forms

    New Company Constitution

    Instructions

    Consent of Officers

    Director's Minutes

    Members Minute Appointing Agent

    Application for Shares

    Share Certificate

    Register of Members


    To obtain sample documents relating to starting a company, click here