Overview of some things to consider when registering an Australian company

This is a guide to some of the issues you need to consider when registering a 'proprietary limited' Company.

It summarises some of the key requirements and processes for registering and running a company, and flags some key obligations for officeholders. (Please note that this guide does not apply to a company that is ONLY going to be the trustee of a Self-Managed Superannuation Fund — however, Cleardocs enables you to register those companies and provides the relevant version of the Constitution.)

 

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Step Question Comments ASIC fee and who must lodge with ASIC
Pre-registration: Reserving a company name
Company name When would I reserve a company name? If you have a particular name in mind, and it's available, then you may want to secure this name before registering the company (particularly if there may be some delay before the company is registered). ASIC form 410 attracts a fee of $40 and each subsequent application for extension of reservation also attracts a fee of $40.
How do I check if a name is available? You can check the National Names Index to see if that name is already taken. This is a free company name search available on the ASIC website here
What are the rules on names I can reserve? ASIC will reserve a name only if it is available. A name is available unless the name is:
  1. identical to a name that is reserved or registered under the Corporations Act for another body; or
  2. identical to a name that is included on the national business names register in respect of another individual or body who is not the person applying to have the name; or
  3. unacceptable for registration under the regulations - for example, if it is restricted (like "ANZAC") or inappropriate.

Although a name may be available, a company or a person with a similar name may bring a claim of unfair competition or 'passing off' against your company. You should seek advice as to how to protect against this possibility.

How do I reserve a company name? You will need to lodge an ASIC form 410 with ASIC.
Can I use Cleardocs, and how much will it cost? Yes.

Cleardocs offers a product to reserve a company name for $62 ($40 of which represents the ASIC fee).

You can also apply for an extension of name reservation using this product.

To reserve a company name, please click here.

How long does it last? The initial reservation period is 2 months. Each subsequent renewal is also for 2 months. However, ASIC advises that only under exceptional circumstances will more than two extensions be granted.

To extend a company name reservation, please click here.

Pre-registration: Thinking about the structure
Shares How many shares can be issued and what are the different classes of shares? A Company must not have more than 50 non-employee shareholders.

There is no restriction on the number of shares that may be issued. However, it may be a good idea to issue 12 shares when the company is registered. This usually makes it easier to transfer shares to new or existing shareholders without having to continually alter the company's share capital. You should seek advice regarding this before deciding on the number of shares in the initial share capital for your company.

You can read which rights attach to which class in the constitution Cleardocs provides by:

  1. clicking on the "Resources" button in the blue bar at the top of the page;
  2. clicking on "Sample documents"; and
  3. clicking on "Company Registration". (At this point, if you are not already logged in, then you will need to log in. Or if you are not registered with Cleardocs, then you will need to register.)

When the .pdf of the document downloads, look in Schedule 2 for the definitions of share classes and rights.

Directors How many directors must a company have? The company must have at least one director.
Do all the directors have to reside in Australia? At least one director must ordinarily reside in Australia.
Do prospective directors have to do anything? Directors must provide their written consent to act as director before the company is registered (and before being appointed a director). Cleardocs provides a personalised consent form for each director as part of its Company Registration package.
How old must a company director be? At least 18 years of age.
Directors' obligations What are the directors' substantive duties under the Corporations Act? Directors are subject to a number of substantive duties under the Corporations Act (as well as generally at law). The Corporations Act sets out a number of the more important duties of directors, including:
  • to act in good faith;
  • to not improperly use their position;
  • to not improperly use information that they have obtained by virtue of being an officer of the company;
  • to act in the best interests of the company;
  • to avoid conflicts between the interests of the company and the director's interests;
  • to act honestly;
  • to exercise care and diligence;
  • to prevent the company trading while it is unable to pay its debts; and
  • if the company is being wound-up, to report to the liquidator on the affairs of the company and to help the liquidator (by, for example, giving to a liquidator any records of the company that the director has).
What are the consequences if a director fails in these duties? The Corporations Act states that a director who fails to perform their substantive duties:
  • may be guilty of a criminal offence with a penalty of 2,000 penalty units or imprisonment  for up to 5 years, or both; and
  • may contravene a civil penalty provision (and the Court may order the person to pay to the Commonwealth an amount of up to $200,000).
Company

Secretary

Do I need a company secretary? No. The Company is not required to have a company secretary.

However, if the company will have only one director, then having a secretary may make it easier for the company to sign documents in a way that is acceptable to the banks.

How many company secretaries can I have? There is no limit to the number of company secretaries a company may have. But it makes sense to only have one.
Do the company secretaries have to reside in Australia? If the company has:
  • one company secretary, then he or she must ordinarily reside in Australia; or
  • more than one secretary, then at least one of them must ordinarily reside in Australia.
How old must a company secretary be? At least 18 years of age.
Do prospective secretaries need to do anything? The person consenting to being appointed as company secretary must provide the company with a signed consent to act as secretary of the company before being appointed. Cleardocs provides a personalised consent form for each secretary as part of its Company Registration package.
Company secretary's obligations What are the secretary's administrative duties under the Corporations Act? The company secretary has a number of administrative obligations under the Corporations Act, including the responsibility for ensuring that the company:
  • notifies ASIC about changes to the identities, names and addresses of the company's directors and company secretaries;
  • notifies ASIC about changes to the register of members;
  • notifies ASIC about changes to any ultimate holding company; and
  • responds, if necessary, to an extract of particulars or any return of particulars that it receives.
What if there is no secretary? Then the company's directors must meet these administrative obligations.
What are the secretary's substantive duties under the Corporations Act? As a company secretary is an officer of the Company, he or she is also subject to the requirements of company officers under the Corporations Act. For example, a company secretary must comply with the following obligations:
  • to exercise care and diligence;
  • to act in good faith;
  • to not improperly use their position; and
  • to not improperly use information that they have obtained by virtue of being an officer of the company.
What are the consequences if a secretary fails in these duties? The Corporations Act states that a company secretary who fails to perform their substantive duties:
  • may be guilty of a criminal offence with a penalty of 2,000 penalty units or imprisonment for up to 5 years, or both; and
  • may contravene a civil penalty provision (and the Court may order the person to pay to the Commonwealth an amount of up to $200,000).
Public Officer Do I need a public officer? Yes. Each company must have a public officer.
How many public officers can I have? One only.
Does the public officer have to reside in Australia? Yes
How old must a public officer be? At least 18 years of age.
What is the process? A public officer must be appointed within three months after the company commences to carry on business or derive income in Australia. Cleardocs provides the documents to take care of this. One of those documents is a letter from the public officer to the tax office. When the company is registered, the public officer needs to send that letter to the tax office.
What are the consequences if the company does not have a public officer? For every day that the company does not have a public officer it will be fined one penalty unit ($110).
Public Officer's obligations What are the public officer's obligations? The public officer is answerable for the doing of all things as are required to be done by the company under the Income Tax Assessment Act 1936 or the regulations.
What are the consequences if the company is in default? If the company is in default of these obligations, then the public officer is liable to the same penalties as the company.
Registering the company
Registration What information do I need to have? You can download a checklist of the information you require to register a company here. The fee for lodging an ASIC form 201 is $400 for a proprietary company. This fee is included in the $537.50 Cleardocs charges.
What documents do I need to have? You will need the following documents in order to register a company with ASIC:
  • Signed consent to act as directors and secretaries forms - Cleardocs provides these personalised forms for each officeholder; and
  • Signed ASIC form 201 - through Cleardocs you sign these "electronically" on the Cleardocs site.
What is the process with Cleardocs? The process for registering a company through Cleardocs is — once you are registered with, and logged in at, Cleardocs — as follows:
  1. Answer the questions on the Cleardocs interface;
  2. Pay Cleardocs;
  3. Through Cleardocs, lodge the ASIC form 201 electronically and pay the ASIC fee;
  4. ASIC will return a Certificate of Incorporation with the company's ACN; and
  5. Cleardocs will then send you the full copy of the register (which includes documents like the first minutes of meeting, share certificates and registers).

For an extra fee of $49.50, Cleardocs will arrange for the company's documents to be printed, bound, and courier delivered.

Post-registration: Notifying ASIC of changes to the Company
Changes to Company What changes to the Company do I need notify ASIC about? Either a director of the Company or the secretary of the Company must notify ASIC (by lodging an ASIC form 484) if any of the following occurs:
  1. Change of a company's registered office or principal place of business address;
  2. Change of name of officeholder or proprietary company members;
  3. Change of ultimate holding company details;
  4. Cease an officeholder;
  5. Appoint an officeholder;
  6. Change to special purpose company status;
  7. Issue of shares;
  8. Cancellation of shares;
  9. Transfer of shares; or
  10. Changes to amounts paid on shares.
There is no ASIC fee for lodging this form within 28 days of the change.

However, if the form is:

  • up to one month late, then a late fee of $65 applies, or
  • more than a month late, then a late fee of $270 applies.
Charge on company property (for example to secure a loan) must be notified to ASIC within 45 days from the creation of the charge. ASIC form 309 & 350
Fee: $135 (309 only)
Change of company name must be notified to ASIC within 14 days after the resolution was passed. ASIC form 205
Fee: $330
Division or conversion of shares must be notified to ASIC within 14 days from the date of change. ASIC form 211
No fee.
Reduction in share capital must be notified to ASIC before the notice of meeting for the reduction in share capital (at least 22 days before the members' meeting). ASIC form 2560
No fee.
Share buy back must be notified to ASIC:
  • If buy back is conditional on a resolution being passed, then a form 281 must be lodged at least 14 days before the resolution is passed.
  • If buy back is not conditional on a resolution being passed and a Form 281 is required, then a form 281 must be lodged at least 14 days before agreement is entered into.
ASIC form 281
No fee.
A form 280 may also be required in certain circumstances.

Order a company document package

Reserve your Company Name here

Register your Company here

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Download a checklist of the information you need to order a document package.