australia-formation

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# Australia Formation

## Australia Formation

## Australia Company Formation Skill v1.2

Australia Company Formation Skill v1.2

## Section 1 -- Quick Reference

**Quick Reference**

| Field | Value |
| --- | --- |
| Country | Australia (Commonwealth of Australia) |
| Currency | AUD |
| Company registrar | Australian Securities and Investments Commission (ASIC) -- asic.gov.au |
| Key legislation | Corporations Act 2001 (Cth) |
| Typical formation time | 1--3 business days (online via BRS) |
| Corporate tax rate | 25% (base rate entities, turnover < $50M); 30% (all others) |
| Skill version | 1.2 |

## Section 2 -- Entity Types Comparison

**Entity Types Comparison**

| Feature | Sole Trader | Partnership | Pty Ltd (Proprietary) | Public Company (Ltd) | Trust (with corporate trustee) |
| --- | --- | --- | --- | --- | --- |
| Legal personality | No | No | Yes | Yes | No (trustee is legal person) |
| Liability | Unlimited | Unlimited (joint and several) | Limited to share capital | Limited | Trustee liability (limited if Pty Ltd trustee) |
| Min. founders | 1 | 2 | 1 shareholder + 1 director | 1 shareholder + 3 directors + 1 secretary | 1 settlor + 1 trustee |
| Min. share capital | N/A | N/A | No minimum (commonly $1) | No minimum | N/A |
| Max. shareholders | 1 | N/A | 50 (non-employee) | Unlimited | N/A |
| Tax treatment | Personal income tax | Partners taxed individually | Company tax rate | Company tax rate | Trust distributions taxed in beneficiaries' hands |
| Admin burden | Very low | Low | Medium | High | Medium--High |
| ASIC registration | No | No (ABN only) | Yes ($611) | Yes | Only if trustee is a company |
| Audit required | No | No | Only if large proprietary | Yes | No (unless regulated) |

**Recommended default:** Proprietary company limited by shares (Pty Ltd) for most commercial purposes.

- **Choose the structure before registering** — Compare ownership, funding, liability, profit distribution and ongoing administration; a company is not automatically the best structure for a small business. Shareholders' liability is generally limited to unpaid amounts on their shares, but directors can be personally liable through guarantees, breaches of duties, insolvent trading and tax obligations, and a corporate trustee does not remove every trustee or director risk.  _([ASIC, Becoming a company director](https://www.asic.gov.au/for-business-and-companies/small-business-director-essentials/becoming-a-company-director))_

## Section 3 -- Registration Process

### Step 1: Choose Company Name

- **Choose Company Name** — Check availability on ASIC's company name check tool; Must include "Pty Ltd" or "Proprietary Limited"; Can reserve name for 2 months ($62 fee) or register directly; Identical or near-identical names will be rejected  _(ASIC)_

### Step 2: Obtain Consent from Officeholders

- **Obtain Consent from Officeholders** — All proposed directors and secretaries must consent in writing before registration; At least 1 director must ordinarily reside in Australia (for Pty Ltd)
- **Director eligibility and director ID** — Directors must be at least 18 and not disqualified from managing companies, and each must apply personally for a director identification number before appointment. A person appointed only to lend their name carries the same duties. A proprietary company using the crowd-sourced funding regime needs at least two directors.  _([ASIC, Becoming a company director](https://www.asic.gov.au/for-business-and-companies/small-business-director-essentials/becoming-a-company-director); [ASIC, Crowd-sourced funding](https://www.asic.gov.au/crowd-sourced-funding))_

### Step 3: Prepare Company Details

- **Prepare Company Details** — Registered office address (must be in Australia; can be accountant's or agent's office); Principal place of business; Share structure (number and class of shares, rights); Details of shareholders, directors, secretary (if any)
- **Governance rules and consents** — Decide whether the company runs on the replaceable rules, a constitution, or both where permitted. Record share classes, rights, numbers and amounts paid or unpaid, obtain members' written consents and the occupier's consent for a registered office the company does not occupy, and open the share register at registration. Registering a company name does not create trade mark rights.  _([ASIC, Register a company](https://www.asic.gov.au/for-business-and-companies/companies/register-a-company))_

### Step 4: Register via Business Registration Service (BRS)

- **Register via BRS** — Go to register.business.gov.au; Can simultaneously apply for: company registration, ABN, TFN, GST, PAYG withholding; Fee: $611 (Pty Ltd, 2025--26 financial year); ASIC processes and issues ACN (Australian Company Number) typically within 1--3 days  _(BRS / ASIC)_

### Step 5: Receive Certificate of Registration

- **Receive Certificate of Registration** — Certificate confirms ACN, company name, date of registration, type; Company legally exists from date on certificate
- **After registration** — Retain the certificate and ACN, check the register against the approved details and record the actual registration date. Do not promise a fixed processing or bank-account opening time, and keep access credentials with the authorised officeholder.

### Step 6: Apply for ABN (Australian Business Number)

- **Apply for ABN** — Free via Australian Business Register (ABR); Required for tax invoices, GST, and dealing with other businesses; Can be applied for during BRS registration  _(ABR)_

### Step 7: Register for GST (if applicable)

- **GST registration threshold** — $75,000 (or will be); $150,000 for non-profits AUD (Mandatory if annual turnover is or will be at threshold; voluntary registration permitted below threshold)
- **GST turnover, not bank receipts** — The threshold uses the GST turnover definition, which differs from every receipt in the bank account. Taxi and ride-sourcing activities must register regardless of turnover, and voluntary registration below the threshold brings reporting obligations.  _([ATO, Registering for GST](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/registering-for-gst))_

### Step 8: Register for PAYG Withholding (if employing)

- **Register for PAYG Withholding** — Required before paying employees or directors; Register via BRS or ATO  _(BRS / ATO)_
- **Payroll obligations from the first payment** — Before the first payment subject to withholding, set up payroll and check worker classification, Single Touch Payroll, awards, leave, workers compensation and state payroll tax. From 1 July 2026, Payday Super requires super guarantee contributions, at 12% of qualifying earnings, to reach the fund within seven business days of payday, subject to specific exceptions.  _([ATO, About Payday Super](https://www.ato.gov.au/businesses-and-organisations/super-for-employers/about-payday-super))_

## Section 4 -- Capital Requirements

**Capital Requirements**

| Entity Type | Min. Share Capital | Min. Paid-Up | Payment Timing | In-Kind Contributions |
| --- | --- | --- | --- | --- |
| Pty Ltd | No statutory minimum ($1 common) | No minimum | As specified in share terms | Permitted (no independent valuation required for proprietary companies) |
| Public Ltd | No statutory minimum | No minimum | As specified | Permitted (expert's report required for non-cash consideration over threshold) |

- **No minimum capital requirement** — Australia has no minimum capital requirements for company formation.

## Section 5 -- Costs Breakdown

**Costs Breakdown**

| Cost Component | Amount (AUD) | Notes |
| --- | --- | --- |
| ASIC company registration | $611 | One-time (Pty Ltd, 2025--26) |
| Name reservation (optional) | $62 | Valid 2 months |
| Business name registration (if different from company name) | $45/year or $104/3 years | Only if trading under a different name |
| ABN registration | Free | Via ABR |
| GST registration | Free | Via ATO |
| ASIC annual review fee | $329/year | Pty Ltd (2025--26) |
| **Total initial cost (government)** | **$611--$673** | Excluding professional fees |
| Legal / accountant setup fees | $500--$2,000 | Constitution, shareholder agreement, tax setup |
| **Total with professional help** | **$1,100--$2,700** |  |

### Annual Maintenance

**Annual Maintenance**

| Item | Cost (AUD) |
| --- | --- |
| ASIC annual review fee | $329 |
| Accountant / tax agent fees | $1,500--$5,000/year |
| Business name renewal (if applicable) | $45/year |
| Registered office service (if using) | $200--$600/year |
| ASIC late fees | $98 (≤1 month) / $411 (>1 month) |

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