How do I choose a company name?
You can only choose a company name that is not already registered to a company or
business. You can go to the ASIC website and the “Check Name Availability” function to confirm
whether your proposed name is identical or similar to another name already registered.
Certain words and phrases must be approved by a specified
Minister or government agency before being used, for example names including: ‘building
society', 'trust', 'university', 'chamber of commerce' and 'chartered’.
You also cannot use words suggesting a misleading connection with government, the
Royal Family or an ex-servicemen's organisation. These restrictions ensure that
a company's name does not mislead people about its activities.
ASIC may also refuse to register certain names if they are considered offensive
or suggest illegal activity.
Can I change the company name in future?
The members of the company can change the name in future by passing a special resolution
and notifying ASIC of the change.
ASIC charges a fee of $366 to change a company name.
When do I get issued with a Certificate of Registration?
When ASIC receives the completed application for registration with the correct fee
- give the company an Australian Company Number (ACN);
- register the company (a company comes into existence as a body corporate at the
beginning of the day on which ASIC registers it and remains in existence until it
is deregistered); and
- issue a Certificate of Registration.
Is the Certificate of Registration sufficient evidence for a bank to establish the
company bank account?
The Certificate of Registration that MYOB receives electronically from ASIC and
provides to you electronically is the original Certificate of Registration (hardcopies
are not issued).
The standard Certificate of Registration is sufficient for a company to open a bank
Does MYOB organise the ABN and TFN?
When should the company apply for an ABN?
ABNs are not compulsory. However, the company needs one before it can trade. You
also need an ABN to register for GST.
More information and registration of an ABN can be found at http://www.abr.gov.au.
Can a trust be a member?
No. A trust cannot own shares in a company because a trust is a relationship - not
a separate legal entity or person.
However, the trustee of a trust, in his, her or its capacity as trustee, is capable
of owning shares and other property on behalf of the trust - see next question.
Can a trustee be a member?
Yes, a trustee can own shares in a company - as long as you include the trustee's
name and their capacity. For example:
‘Gina Doe in her capacity as the trustee of the Doe Family Trust'.
In this case, the trustee holds the shares in the company on trust for the beneficiaries
of the trust. (As noted above, the trust itself cannot own shares as it is not a
Can a corporate trustee be a member?
Yes a corporate trustee can own shares in a company - as long as you include the
trustee's name and their capacity. For example:
‘Company Pty Ltd in its capacity as the trustee of the Company Trust'.
In this case, the trustee holds the shares in the company on trust for the beneficiaries
of the trustee's own trust.
(As noted above, the trust itself cannot own units as it is not a legal entity).
Can the company act as a trustee of a trust?
Yes, the company can act as a corporate trustee of a trust or of a number of trusts
(subject to the comments below regarding acting as a trustee of a self-managed superannuation
If the company wishes to act as a trustee of a self-managed superannuation fund,
then it should solely undertake this role and not engage in any other business (see
Can the company be the trustee of my self-managed superannuation fund?
Yes, the company can act as the trustee of a self-managed superannuation fund.
However, if the company is the trustee of a self-managed superannuation fund should
act solely in this role and engage in any other business.
The constitution of a company acting as a trustee of a self-managed superannuation
fund will include a rule to this effect.
Can the company change its constitution in the future?
The members of the company can amend the company’s constitution by passing a special
resolution and notifying ASIC of the change.
If I want to issue more shares in the future, do I need to create them now?
If you have elected on formation to have different classes of shares to ordinary
shares, these will be listed in the relevant Schedule to the constitution regarding
different classes of shares.
In addition, the constitution enables you to create different classes of shares
and issue more of the same class, in the future. If you wish to issue preference
shares, the terms of the preference shares relating to the matters in rule 10 of
the constitution must be set out in the constitution or approved by a special resolution
of members at a general meeting (see below for further information).
The directors have the power to issue shares. However, if you have elected to have
pre-emptive rights apply to new issues of shares, such issue must be offered to
all members pro-rata first.
Can I issue preference shares under the Constitution?
You may only issue preference shares if you have selected the option to create a
class of preference shares setting out the rights you want these shares to have.
If not, the members will need to pass a special resolution to create a class of
preference shares setting out the rights attached to the preference shares in that
special resolution or in the constitution. If you are unsure about this process,
you should obtain legal advice.
What is the benefit of having different classes of shares?
Different classes of shares confer different rights on the holders. You might want
some members to have preference shares so that they rank in priority to ordinary
members. You might also want members to have different voting rights or rights to
share in the profits of the company. It depends on your circumstances.
Can I transfer my shares in the company?
You can transfer your shares in the company by having you, as the transferor and
the relevant transferee signing a share transfer form.
If, however, you have selected to have pre-emptive rights on transfer included in
your company constitution, then as a transferor you must offer your shares pro rata
to the other members first. Pre-emptive rights are rights that members have to compel
their fellow members and the company (as applicable) to offer shares to them before
offering to third parties.
What is a corporate key?
Within two days of registration, ASIC issues a unique eight-digit number associated
with your company's ACN (the 'corporate key' ) to the company's registered office address.
You can use the corporate key to register to view company records, lodge forms for
the company and receive annual statements online. The Corporate Key must be included
on some paper forms you lodge with ASIC to notify changes to company details.
What is a subsidiary?
A subsidiary of another company is a company which is controlled by that other company.
The key element is ‘control’. One company controls a second company (i.e. its subsidiary)
if it has the capacity to determine the outcome of the decisions of the second company’s
financial and operating policies.
If a company holds more than 50% of the shares in a second company, then that is
deemed ‘control’ and the second company is a subsidiary of the first mentioned company.
However, ‘control’ can be implemented in other ways (e.g. by special voting rights
or voting arrangements).
What is an ultimate holding company?
A company is an ultimate holding company if it has a subsidiary and the company
is not a subsidiary of another company.
An ultimate holding company may have one subsidiary only in its corporate group
or be the ultimate holding company of a number of subsidiaries (direct and indirect)
within its corporate group.
Can a proprietary company raise money from the public?
Proprietary companies are generally not allowed to raise money from the public by
Other than raising money from wholesale investors, a proprietary company may only
raise money within the small scale offering exemption ($2m/20 retail investors/
12 months) provided that personal offers are made.
A proprietary company must also not have more than 50 non-employee members.
How many directors must a proprietary company limited by shares have?
A proprietary company limited by shares must have at least 1 director.
Who can be a director?
To be a director, you must be 18 years old or older.
You must not act as a director or secretary (or manage a company) without court
consent if you:
- are an undischarged bankrupt;
- are subject to a personal insolvency agreement or an arrangement under Part X of
the Bankruptcy Act 1966 (Bankruptcy Act) that has not been fully complied with;
- are subject to a composition under Part X of the Bankruptcy Act and final payment
has not been made; or
- have been convicted of various offences such as fraud or offences under company
law, such as a breach of your duties as a director or insolvent trading.
If you have been convicted of one of these offences you must not manage a company
within 5 years of your conviction. If imprisoned for one of these offences, you
must not manage a company within 5 years after your release from prison. ASIC can
also ban you from being a company director in certain situations. If you’re not
allowed to be a company director or secretary, you’re not allowed to manage a company.
It is a serious offence to set up dummy directors while you really manage the company.
Does a director have to be a member?
There is no legal obligation for a director to be a member of a company.
A director is usually employed by the company to manage its day to day affairs and
a director has fiduciary duties to members.
How can directors be added or removed?
The initial director or directors can appoint more directors in the future as follows:
- the new director must be at least 18 years old;
- the new director must consent to their appointment before they are appointed;
The current directors must appoint the new director by recording the appointment
and signing the record. The company must then notify ASIC of the appointment within
28 days after the appointment at www.asic.gov.au
The directors can be removed as follows:
- the director can resign;
- the director can be removed by the members;
The office of director becomes vacant if the director dies, becomes of unsound mind,
becomes disqualified from being a director under the Corporations Act 2001 or in
some cases (depending on constitution), if the director fails to attend a certain
number of meetings without leave from the board.
The company must then notify ASIC of any appointment or removal of directors by
lodging an ASIC Form 484 within 28 days after the appointment or removal. You can
download the form from the ASIC website and lodge it with ASIC at www.asic.gov.au
What are directors required to do?
As a director, you must:
- be honest and careful in your dealings at all times;
- know what your company is doing;
- take extra care if your company is operating a business because you may be handling
other people’s money;
- make sure that your company can pay its debts on time;
- see that your company keeps proper financial records;
- act in the company’s best interests, even if this may not be in your own interests,
and even though you may have set up the company just for personal or taxation reasons,
- use any information you get through your position properly and in the best interests
of the company. Using that information to gain, directly or indirectly, an advantage
for yourself or for any other person, or to harm the company may be a crime or may
expose you to other claims. This information need not be confidential; if you use
it the wrong way and dishonestly, it may still be a crime.
You should refer to ASIC Info Sheet 79 and seek legal advice if you are unsure of
your duties and obligations as a director.
What is a director’s interest?
If a director of a company has an interest (for example, a conflict of interest)
in a matter that concerns the Company, they may be required under the Corporations
Act 2001 (Cth) to give the other directors notice of the nature and extent of the
This notice must state the nature and extent of the interest and be given at a director's
meeting or to the other directors individually in writing.
This requirement does not apply to sole director companies.
If you are a director and you are unsure of the nature of your interests which are
required by law to be disclosed to the company, you should seek legal advice.
How can a sole director execute documents?
Subject to the constitution, a sole director who is also the company secretary may
execute a document by signing it as a sole director and company secretary.
A sole director who is not also the company secretary (where the company does not
have a secretary) may execute a document as a sole director.
If a company has a sole director but has a different person as the company secretary,
then the sole director is unable to execute documents alone and documents should
be executed by the director and company secretary.
It is recommended that where a sole director executes a document alone, that their
signature is witnessed, or the sole director records a resolution authorizing that
they can sign the document and attach this resolution to the document.
Does a company need a seal?
A company is not required to have a company seal. It is optional.
A common seal can be purchased from most printers and stationers that create rubber
stamps if required.
Does a proprietary company limited by shares need a company secretary?
A proprietary limited company is not required to have a company secretary, but it
may have one and the company constitution provided by MYOB allows for this.
What is a Public Officer?
The public officer is responsible for ensuring that the company pays the correct
amount of tax. Companies carrying on business or deriving property income in Australia
must have a public officer (unless the company is specifically exempted).
The company must appoint a public officer within 3 months of starting to carry on
business or first earning income in Australia.
The public officer must live in Australia and be at least 18 years old.
If a company is in default, then the public officer is liable to pay any penalties
(but is not personally liable for payment of tax due by the company).
Do I need to prepare a financial report each financial year?
A small proprietary company is required to prepare a financial report for a financial
year only if:
- it is directed to do so by members with at least 5% of the votes or by ASIC; or
- it is controlled by a foreign company for all or a part of the year and it is not
consolidated for that period in the financial statements for that year lodged with
ASIC, subject to certain limited exemptions.
A large proprietary company is required to prepare an annual financial report and
a director’s report.
Who needs an auditor?
The majority of small proprietary companies do not need auditors as they are not
required to prepare financial reports, except if:
- they are controlled by a foreign company and are not consolidated with the foreign
company’s financial statements lodged with ASIC (and are not granted ASIC relief);
- directed to do so by members with at least 5% of the votes by ASIC.
Large proprietary companies are generally required to have their financial reports
audited, subject to ASIC relief which may be granted in limited circumstances.
Can a proprietary limited company be a not-for-profit company?
There are various structures that are suitable for different types of not-for-profit
You should obtain legal advice about which structure is best to suit the company’s
A not-for-profit proprietary limited company is a special purpose company. The company’s
- require the company to pursue charitable purposes only and to apply its income and
profits in promoting these purposes;
- prohibit the company making distributions to its members and paying fees to its
directors for their services as directors;
- require its directors to approve all other payments the company makes to them; and
- on a winding-up, require that the assets, profits and property must be distributed
to another entity which is a not-for-profit or charitable purpose company.
What is a Registered Office?
An Australian company must have a registered office to which correspondence from
ASIC can be addressed.
A registered office does not need to be located at the company's place of business.
If the company does not occupy the premises, the occupier of the premises must have
given written consent to the company's use of those premises as its registered office.
The address cannot be a post office box address.
What characters are accepted in the password field of CompanyDocs Sign-up page?
Password must be minimum of 8 characters and maximum of 20 characters. Your password
must be a combinations of letters (a-z , A-Z), numbers (0-9).