How to Start a Company in Australia

Step 1: Get your Directors Identification Number (DIN)

It is now mandatory for all new directors to have a unique Directors Identification Number (DIN) before being appointed as a director.  It is a 15-digit number unique to you, that you keep forever and use whenever you are appointed a director of a company.  You only need to apply once, and it is free to do so.

You must apply personally to be properly identified and I cannot apply on your behalf.

If you do not have a DIN yet, then the easiest and quickest way to apply online with a myGovID.  The ABRS website provides all the information you need and the steps to take to get your identity verified with ABRS and obtain a Directors ID (https://www.abrs.gov.au/director-identification-number/apply-director-identification-number).

Step 2: Decide on Your Company Type and Name

The first step in starting a company in Australia is to decide on the type of company you want to establish. The most common type is a proprietary limited company (Pty Ltd), which limits the liability of its shareholders. Once you’ve decided on the company type, you need to choose a unique name that complies with ASIC’s naming conventions.

Ensure the name is not identical to an already registered company or business and does not contain any restricted words or phrases without approval.

You can use ASIC’s tool to determine if a company name is available or not. 

To understand the type of business structures that can be used to run your business, read more on business structuring in our article.

Step 3: Understand Your Obligations

Before registering your company, it’s crucial to understand your legal obligations as a director. This includes ensuring the company complies with the Corporations Act 2001, maintaining accurate financial records, and acting in the best interests of the company. Familiarize yourself with these responsibilities to avoid potential legal issues down the line.

Our article on the responsibilities of a Director should help get you started on understanding the basics.

Step 4: Decide on your Shareholding Structure

This is where things can get more difficult for first time business owners. 

The shareholders are the owners of the company and will take profits through declared dividends.

The receipt of dividends comes with taxation issues that should be addressed and thought about when you start your company to ensure that you set the shareholding structure that will best utilise efficient tax strategies. 

If you plan on having more than 1 shareholder, then it is also important to have a solid Shareholders Agreement that sets out each shareholders rights, responsibilities, and expectations.

You can read more about the types of shareholder issues in our article. 

Step 5: Gather Required Information

To register a company in Australia through ASIC, you’ll need to provide specific information, including:

• The proposed company name.
• The names, addresses and date of births of the company’s directors and secretaries.
• The number of shares each member agrees to take on (if applicable).
• The location of the company’s registered office and principal place of business.

This information is critical for the registration process, so ensure accuracy and completeness, because it is not an easy task to change the information later. 

Step 6: Register Your Company with ASIC

Once you’ve gathered all necessary information, the next step is to register your company with ASIC. This can be done online through the ASIC website, via a registered agent, or through software that interacts directly with ASIC’s systems.

You’ll need to fill out Form 201 – Application for registration as an Australian company, which requires a fee. After submission, ASIC will review your application and, if successful, provide you with an Australian Company Number (ACN).

You can do this yourself online directly with the ABRS here https://register.business.gov.au/. 

Again, be careful and ensure you register accurately and correctly because it is not as easy as you might think to change or amend details later. 

Step 7: Pay your Registration Fees

Each company registration requires you to pay an ASIC fee (currently $576 for a Pty Ltd) to register a new company.

There will also be annual ASIC Fees to pay for the company to maintain its registration into the future (currently $310 for a Pty Ltd).

Step 8: Understand Post-Registration Requirements

After your company is registered, there are several post-registration requirements to be aware of, including:

• Obtaining an Australian Business Number (ABN), if the company does need one.
• Registering for Goods and Services Tax (GST) if your company’s turnover is more than $75,000 per year (which makes it compulsory) or registering if under that turnover, because it is advantageous to do so.
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Step 9: Setting your Business Up for Success

Whilst not strictly required, here are a few tips on ensuring that the new business you’ve set up will be a success in the future:

• Setting up proper invoicing, accounting and bookkeeping systems to manage your company’s finances and tax obligations.
• Have proper terms and conditions for the sale of your goods or services.  Ensure you properly deal with any Australian Consumer Law issues that relate to your business. 
• Maintain good record keeping practices for your business, which ensures you’ll be able to address customer issues promptly.

Conclusion

Starting a company in Australia requires careful planning and understanding of the regulatory landscape. By following these steps and ensuring compliance with ASIC’s requirements, start-ups can set a solid foundation for their business ventures.

Remember, the key to a successful company starts with a thorough preparation and a clear understanding of your obligations as a company director.

For more detailed information and guidance, consider consulting with a legal or financial advisor to ensure your new business journey begins on the right foot.

We can assist you with whole process, just get in touch and we’ll get things started for you.