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Australia: Company
Forms
BACK TO AUSTRALIA
INFORMATION: BUSINESS, TAXATION AND INVESTMENT
Australia
Introduction
Apart
from the business forms described below, other
types of organisation in Australia include sole
traders; trusts; unlimited companies; charitable
or not-for-profit organisations, generally registered
as public companies limited by guarantee; special
purpose vehicles, particularly superannuation
trustee companies; and public authorities.
If the business structure chosen is as a sole
trader, a partnership or a trust (i.e. not as
a company), the business name must be registered
in the state or territory in which it will operate.
A business name does not need to be registered
if the business is to be conducted under the
first name and surname of a person, or their
partner.
If it is planned to set up a business in more
than one state, the business name must be registered
separately in each state.
A business name has no legal status. Registration
of a business name does not create a legal entity
(only registering a company creates a legal
entity).
An Australian business number (ABN) and tax
file number (TFN) should be obtained from the
Australian Taxation Office (ATO). The business
must register for goods and services tax (GST)
if turnover is above a certain threshold, and
for pay-as-you-go (PAYG) withholding if the
business has employees.
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Australia Private Limited Liability Company
A
limited company in Australia is normally a “proprietary
company” or “Pty”; these are
divided between the Large Pty and the Small
Pty. It must register with the Australian Securities
& Investment Commission (ASIC) and obtain
a nine-digit Australian Company Number (ACN).
It can then pursue its chosen activity throughout
Australia, without needing to register in individual
states.
There is no minimum share capital. There is
no necessity to specify authorised and paid-up
share capital.
A Pty must have at least one director, who must
ordinarily reside in Australia. There is no
requirement for a board of directors, or a supervisory
council.
A Large Pty is a limited company that cannot
satisfy at least two of the following conditions:
-
the consolidated revenue of the company is
less than AUD25m;
-
the value of the consolidated gross assets
of the company is less than AUD12.5m; and
-
the company and its subsidiaries together
have fewer than 50 employees at the end of
the financial year.
In the case of a Large Pty or a Small Pty controlled
by foreign entities, the Pty must provide an
auditor’s report to the ASIC, together
with their written financial statements and
directors’ report, for each financial
year.
Documents needing to be filed with the ASIC
on registration include:
-
an
application to register, with the prescribed
fee;
-
the
proposed company name (if the company does
not have a proposed company name, the name
on registration will be its ACN);
-
the class and type of company;
-
the
registered and principal business office details;
-
director
and secretary details; and
-
share
structure and members’ share details.
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Australia Public Limited Liability Company
A Public Limited Liability Company is a Pty
with more than 50 non-employee shareholders
and whose shares are available to the public
by being listed on a financial market. It must
have at least three directors and at least one
secretary. At least two of the directors and
one secretary must ordinarily reside in Australia.
There is no minimum share capital for public
companies. There is no necessity to specify
authorised and paid-up share capital.
Public Limited Liability Companies must provide
an auditor’s report to ASIC, together
with their written financial statements and
directors’ report, for each financial
year.
Documents needing to be filed with the ASIC
on registration include:
-
an
application to register, with the prescribed
fee;
-
the
proposed company name (if the company does
not have a proposed company name, the name
on registration will be its ACN);
-
a
copy of the company’s written constitution
(or combination of the official replaceable
rules and constitution);
-
the class and type of company;
-
the
registered and principal business office details;
-
director
and secretary details; and
-
share
structure and members’ share details.
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Australia Partnership
Partnerships
do not have limited liability and do not have
a legal “personality” in their own
right. For a partnership to exist, under the
Partnership Act, four main criteria must be
satisfied:
-
a valid agreement (not necessarily written)
between the parties;
-
the
intent to carry on a business;
-
ownership
in common (with some mutuality of rights,
interests and obligations;
-
the
intent to make a profit (thus charitable organisations
cannot be partnerships).
Partners are advised to draw up a partnership
agreement at the start of the venture, outlining
matters such as the procedure to be followed in
the event of either a partner’s death or
a dispute, the contributions made by each partner,
and the way in which the profits and losses of
the partnership are to be dealt with, amongst
other issues.
Partnerships can be formed of general partners
with unlimited liability, or limited partners,
or a mixture of both. Limited Partnerships are
formed when registered under Part III of the Act.
The paramount characteristic of such a partnership
is that the limited partners’ liability
will be limited to the amount shown in the Register
of Limited Partnerships. Limited partners cannot
take part in the management of the Limited Partnership
or they will be liable as general partners.
An application for registration as a Limited Partnership
is made by lodging a statement signed by each
partner, which should include the firm’s
name, its registered address, the name and address
of each partner, and their individual contributions.
Australia Branches and Representative Offices
Branches
and Representative Offices exist, but do not
have legal personality. However, foreign businesses
that are registered abroad and want to pursue
an activity as a “foreign company”
(whether incorporated or unincorporated in Australia)
must be registered under the Corporations Act.
Foreign companies are registered by a form submitted
to the ASIC, accompanied by:
-
a
certified copy of a current certificate or
registration (or a document of similar effect
that confirms that the company is currently
registered in its current place of incorporation);
-
a
certified copy of the company’s constitution;
-
a
memorandum of appointment of a local agent
or power of attorney in the agent’s
favour;
-
notices of any charges over any property in
Australia;
-
a
memorandum stating the powers of its directors
in Australia; and
-
payment
of the appropriate fee.
Names containing restricted words, such as “Bank”,
“Insurance”, and “Trust”,
will not be permitted unless an appropriate
national operating licence has been obtained
by the company.
A financial statement must be submitted every
year.
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