How to set up a new Australian limited company
Checklist: before you start
To set up a new Australian company, the basics you will need are:
1. A company name which ends in "Proprietary Limited" (or just "Pty Ltd" for short) or "Limited" (or "Ltd" for short), depending whether it is a private or public company. The name cannot be identical to an existing company name or registered business name, although it can be very similar. ASIC usually only rejects exact matches. Certain words are restricted, such as "bank", "university" or "trust". The full list of names that cannot be used is here. If you don't choose a name (or don't want to choose a name) the company's name will be its Australian Company Number (or ACN). For example, the company's name could be just ACN 123 456 789 Pty Ltd.
2. One shareholder minimum (for either a private or a public company). A proprietary (private) company has a maximum of 50 shareholders (not counting employee shareholders). If you want more than this number of shareholders, you need to set up a public company. There is no minimum share capital required to incorporate a new company, although there has to be at least one share on issue at the time of formation. There is no Australian franchise tax or similar impost on share capital.
3. One director minimum for a private company, or 3 minimum for a public company. Directors have to be individuals (not companies), and aged 18 years old or above. At least 1 director has to be an Australian resident. You will need a written consent from the director, which you should keep with the company's records (it does not need to be filed with ASIC).
4. A public company needs a company secretary, but this is optional for a private company. The secretary can be the same person as the director. In a one director company, it is common for the same person to be both the sole director and sole secretary. You will need a written consent from the secretary, just like a director.
5. All companies need a registered office in Australia. This can be the office of the company's accountant or lawyer, or even your home address. For a proprietary (private) company, the office does not need to be open to the public. However, it is a place where legal documents can be legally served on the company, so it cannot be a Post Office Box. If the company does not own or lease the office, you will need the occupant's written consent for use as the registered office.
6. Decide if you need a Constitution (this is the internal rules for the company, which in other countries may be called By-laws or Articles of Association). Public companies require a Constitution, and have to file it with ASIC with the incorporation documents. A Constitution is optional for a private (proprietary limited) company. If you don't have a Constitution then the "replaceable rules" will apply. These are a set of basic rules in the Corporations Act which deal with matters such as appointment and powers of directors, issue and transfer of shares, meeting procedure, and dividends. Click here for the ASIC guide and complete list of replaceable rules. For a company with external investors or directors, or multiple shareholders, a written Constitution is usually advisable.