[ESTABLISHING A BUSINESS ENTITY IN AUSTRALIA]
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The Corporations Act sets out certain tests to determine whether a company is a “large proprietary” or a “small proprietary” company, including consolidated revenue thresholds and the number of employees of the company (and any other entity it controls). There are less disclosure requirements imposed on a small proprietary company, including that its financial reports do not need to be audited. Public company (Limited) Public companies involve ownership by the public and they are not restricted by the same limitations that apply to Pty Ltd companies. A public company is able to raise capital directly from the public by offering shares and other securities. Subject to certain requirements as set out in the ‘ASX Listing Rules’, public companies may also apply for listing on the Australian Securities Exchange in order to get access to capital markets. Public companies:
must have a registered office in Australia that is open each business day for at least 3 hours between 9am and 5pm; and may raise capital by issuing a disclosure document to offer shares and other securities to the public/potential investors.
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Establishing a Pty Ltd company The process for incorporating a Pty Ltd company in Australia is relatively straightforward and inexpensive. It is also a relatively quick process - subject to all relevant information being provided, a company can be registered in a matter of days.
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Choose a company name Before registering a company, the owners must choose the name for the company. The appropriate searches should be conducted to ensure that the proposed company name is not identical or similar to another Australian company or business name, and that it does not infringe on the intellectual property rights of another entity. If the company wishes to trade using a name that is different to the company’s registered name, then it must register this name separately as a business name with ASIC. Appropriate searches should also be conducted to ensure the proposed business name is not similar to existing business names, company names or trade marks. Consider internal operations Before registering the company, the owners will need to decide what the governance framework for the company will be. For example, how directors will be appointed and removed, the terms of
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must one shareholder with no upper limits on the number of shareholders; have at least must have at least three directors (not including alternate directors), two of whom must ordinarily reside in Australia; must have at least one secretary, who ordinarily resides in Australia; must have an auditor, and such auditor must be appointed within 1 month after the day that the company was registered; must have a public officer for tax purposes;
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(d)
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ILN Corporate Group – Establishing a Business Entity Series
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