Oct 6, 2021 How to register a Company or Business: Everything you need to know
Knowing how to register a company in Australia shouldn’t be a daunting process, and we’re here to help you understand all of the requirements involved.
What is the difference between a company and a business?
Before starting the registration process, it is important to understand the difference between a company and a business, as this ensures you choose the best structure for you and your needs.
A company is a distinct legal entity with its own rights and obligations and exists separately from the individuals that run it. A company can be operated by a sole proprietor who fulfils all of the required roles (i.e., director and shareholder) or can be structured to include various officeholders and shareholders. Other companies can also own shares within your company.
Unlike a company, a business structure and business name registration are more commonly connected to a sole trader or a partnership. As a result, the business is ultimately connected to the individual that runs it, rather than existing separately in the way that a company does. As a business registration is connected to an ABN, an individual can also have multiple businesses connected to the one ABN and trade using those details as they wish.
It is also worth noting that a company can also register a business name using their ABN details. Registering a business name allows a company to trade without ‘PTY LTD’ or under an entirely different name.
How to register a company:
Choose a name:
To register a company, you will will first need to choose a company name that is currently available. Our system automatically confirms with ASIC whether or not your desired name is available, so you can proceed without concern.
ASIC has also restricted the use of certain words and phrases in company names. You will need to ensure that your desired name does not include any of the following:
- A name that is undesirable or likely to be offensive
- Any word that includes ‘Commonwealth’, ‘Federal’, ‘Crown’, ‘Government’ or 'Bank'
- Words that are misleading such as ‘University’, ‘Trust, or ‘Chartered, or are similar
- Names that are identical to existing business name
You are able to register a name using a word that is not found in the Macquarie Dictionary, but this means your application will be marked for manual review as ASIC assesses those details before registering your company.
If you would like to use an identical business name registration to register a company, you will need to declare that you are the owner of that identical registration. To do this, you will just need to ensure that you have included the ABN details connected to that registration, and that the owner of that registration has been included in the company as an officeholder or shareholder.
Choosing a company name also allows you to get creative! What do you want to communicate to your customers? Do you want the name to reflect your business activities? Will you be including some of your personal details in the company name? Whatever you decide, your company name is always unique, as ASIC will not enable multiple registrations using identical or nearly identical names.
Once registered, it is possible to still change your company name further in the future. However, although this is an option, it is relatively expensive (with ASIC’s fees for this change costing approximately $400), and so it is recommended that you think carefully before proceeding. Another option is to register a business name instead of changing those company details, as this will allow you to trade using a different name, but for a significantly lower fee. If you decide to change your company name, you will just need to complete that process directly through ASIC.
Choose a location:
When thinking about how to register a company in Australia, you will have to nominate both a registered office address and principal place of business.
If you want to register a company in Australia, both the registered office address and principal place of business address must be physical addresses within Australia. You cannot use a PO Box address for either of those locations. It is common for a registered office address or principle place of business address to be your home address when starting out, and you can easily amend these details through ASIC in the future if this changes as your business develops. If you are using your home address, you can also apply to ASIC to have these details suppressed so that this information is not publicly accessible.
You can also use the same address for both your registered office address and principal place of business.
Nominate officeholders:
A key part of applying to register a company in Australia is ensuring you have nominated the required officeholders. Company officeholders are the people who make the major decisions regarding how a company operates. ‘Officeholder’ includes all positions such as the company director, secretary, and public officer.
At a minimum, you will need to nominate at least one director, one shareholder, and an applicant. If you are a sole proprietor - meaning you intend to be the only person included in your company to start off with - you can nominate all three required positions to yourself. It is also important to note that the ‘applicant’ is the person filling out the application, and you will have to include their details as necessary.
Nominating a company secretary and public officer is not compulsory, but it might be worth considering whether nominating an individual to hold these positions will benefit you at the moment.
Allocate shares:
Alongside nominating a director and applicant, you are also required to appoint at least one shareholder in order to register a company. This can be either an individual, company, or other organisation, and you can nominate one sole shareholder or multiple.
A shareholder is essentially an owner of a company as determined by the number of shares they own. Therefore, if a shareholder holder owns 100% of the shares, they will own 100% of the company. In comparison, shares might be divided equally between two parties, in which case they would both have a 50% ownership within that company.
Once you have nominated a shareholder, you then need to be determine their shares are allocated. This includes determine how many shares will be held by each shareholder, and the price per share.
You will also need to determine if these shares will be held beneficially on behalf of someone else, or if the benefit of those shares will go directly to the entity included as a shareholder. If you want to include a trust as a shareholder, you will need to nominate the trustee as a shareholder within your company, and then declare that they are holding those shares beneficially on behalf of the trust.
Thankfully, EasyCompanies has already broken down many of these key considerations for you, and we would recommend taking a look over this information before beginning your application.
As with all of your other company details, your share structure can also be changed later, and this too can be done directly through ASIC.
Other considerations:
Once you have determined the main structure of your company, it is up to you to decide how you will use your company once it is registered. It is important to know what you want to use your company for, as this will also determine whether you need an ABN, or if registering a business name is a good move for you.
In most cases, if you want to carry out business activities, handle invoices or employ staff, it can be helpful to apply for both an ABN and a business name.
EasyCompanies has made this process as straightforward as possible for you, and you can select these additional registrations from within the ‘extras’ step of your company registration application.
How long does it take?
EasyCompanies’ application is designed to be as user-friendly as possible. As a result, the application should take about 20-30 minutes to complete, and your company will be registered in under 5 minutes once you submit your application.
How to register a business name:
When trying to work out how to register a business, it is important to first understand what a business structure actually is. A business is essentially a commercial structure that carries out business, professional & commercial activities. In most cases, a business is distinguished from a company as it is can be operated by a sole trader, partnership, or non-incorporated structure.
Chose a name:
Whether you want to register a business name as a sole trader or as a company, the first step is to choose an available name. Our system automatically checks to see if your name is available with ASIC, so you can ensure that the name you select has not already been registered by someone else. As long as it is available and does not contain a restricted word, you can register any name you like. This is an opportunity to get creative and show your customers what your business is all about - so have some fun with it!
Once registered, you can no longer change your business name. ASIC does not allow registered businesses name to be amended in anyway. Due to this, you must make sure that you correctly spell your business name and use the appropriate grammar.
Include an ABN:
After settling on your desired business name and selecting whether you would like to register that name for one or three years, you will need to include the ABN details you would like this registration to be connected to. This can be a sole trader, partnership, or company ABN, but you must understand that this confirms who will be trading using that business name. For example, if you connect that registration to your sole trader ABN, this means that you will only be able to use that business name when operating as an individual.
You can also have multiple business names connected to the one ABN and then trade using those details as you wish.
If you do not have an ABN yet you can register one with us here and add the business name application to this order.
Add associate details:
A business registration application also requires you to include the personal details of either the sole trader, partnership, or a representative from the company applying for that registration. You will just need to include their personal information and contact details as prompted within the application.
Like with a company registration application, you will also have to declare who is applying to register the business name, and include their full name details.
Choose a location
When you apply to register a business name, you will have to include the details of your service address & principal place of business address. As with a company, this needs to be a physical location within Australia, but the same address can be used for both your service address and principal place of business.
How long does it take?
A business registration application generally takes around 15-20 minutes to complete, and your business name is registered within 2-3 business days. You receive confirmation via email once this name has been successfully registered, and this includes a copy of your ASIC certificate of registration.
Still confused about how to register a company or a business name?
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