Are you thinking of starting a business? Then it’s going to be an exciting journey that can be both rewarding and challenging. One of the crucial decisions you’ll have to make as you start a business is choosing the right legal structure. Registering a company is a popular option for many entrepreneurs in Australia, and for a good reason.
This article will explore the benefits of why you should register a company and the steps involved in the process.
Why should you register a company?
There are several reasons to register a company, including:
- Limited liability – as mentioned above, registering a company can protect your assets if the business encounters financial difficulties.
- Perpetual existence – a company has perpetual existence, meaning it can continue to operate even if the shareholders change.
- Professional image – having “Pty Ltd” (proprietary limited) at the end of your business name can add credibility and professionalism.
- Access to funding – registering a company can make it easier to access funding from banks or investors.
Choosing a Company Name
One of the first and most important steps in registering a company is choosing a name for your business. Your company name should be unique and not already registered by another company. You can check your chosen name’s availability by searching on the Australian Securities and Investments Commission (ASIC) website. It’s also important to consider the image you want to convey with your company name, as it can impact how potential customers and investors perceive your business.
Determining the Company Structure
The structure of your company will determine how it is managed and who has ownership. Proprietary companies are the most common structure for small to medium-sized businesses in Australia. They are privately owned and managed by directors, with restrictions on the transfer of shares. On the other hand, public companies can have unlimited shareholders, and their shares can be traded on the stock exchange. The decision on which structure to choose will depend on your business goals and growth plans.
Choosing a Registered Office
Your company must have a registered office where legal documents can be served. This can be a physical address or a virtual office. The registered office must be located in Australia, and it must be open during business hours. You should also ensure your company’s website displays the registered office address, business cards, and letterheads.
Obtaining an ABN and GST
After you’ve chosen your company name, structure, directors, shareholders, and registered office, you’ll need to obtain an Australian Business Number (ABN) and register for Goods and Services Tax (GST). These are necessary for tax purposes. You can apply for an ABN and register for GST on the Australian Business Register website.
Lodging the Required Documents with ASIC
Once you’ve completed all the previous steps, you must lodge the required documents with ASIC. These documents include the application for registration, consent forms from the directors and shareholders, and a statement of compliance. You can lodge these documents online via the ASIC Connect portal or by mail. There is a fee for registering a company, and the cost varies depending on the type of company and the state in which it’s registered.
When you register a company, you gain numerous benefits, including limited liability, professional image, and access to funding. While the process may seem daunting, it’s relatively straightforward and can be completed with the help of a professional. By taking this step, you can bring your business to life and set it up for success.