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.)Robert Green
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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:
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
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:
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:
|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:
|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:
|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:
|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:
|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:
|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:
|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:
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:
||There is no ASIC fee for lodging this
form within 28 days of the change.
However, if the form is:
|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|
|Division or conversion of shares must be notified to ASIC within 14 days from the date of change.||ASIC form 211|
|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|
|Share buy back must be notified
||ASIC form 281|
A form 280 may also be required in certain circumstances.
Download a checklist of the information you need to order a document package.
Leigh is a partner in the Maddocks Tax & Revenue team.
Leigh regularly provides advice on:
His advice covers both direct and indirect tax considerations.
Leigh advises Australian and multinational companies, high net worth individuals, accountants and financial advisers on all areas of taxation law.
The legal information and commentary on this site is general only. Documents ordered through Cleardocs affect the user's legal rights and liabilities. To assess their suitability for the user, legal accounting and financial advice must be obtained.
For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of their team.