So you need to register your company. You have seen some other company names and they all seem to have some abbreviations at the end of the name. These abbreviations seem formal and fancy, and now you have several questions on your mind:
- Do I need to use these abbreviations?
- If so, which ones can I use?
- Moreover, what do those abbreviations even mean?
Firstly, to answer question 1, you probably do need to use one or two of the abbreviations that you typically see at the end of other company names as they serve a legal purpose. Meanwhile, the answer to the second question will depend on the legal status of your company. You must use the appropriate abbreviation for your company. So then, the final question: what do the abbreviations even mean and how do they relate to the legal status of the company?
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Acceptable Abbreviations
Section 601DB of the Corporations Act 2001 (Cth) (CA) sets out some acceptable abbreviations that you can include in your company name. Each of the following words can be replaced with the abbreviation, with or without a full stop, when they appear in a company name.
- Company: Co or Coy
- Proprietary: Pty
- Limited: Ltd
- Australian: Aust
- Number: No
- and: &
- Australian Registered Body Number: ARBN
- Registered: Regd
Abbreviations indicating legal status
Some of the acceptable abbreviations listed above serve a purpose of indicating the legal status of the company.
Pty
Pty stands for Proprietary. Accordingly, the inclusion of “Pty” at the end of a company name indicates that it is a private company. Private companies have limits on the shares that they can issue and the amount of non-employee shareholders they can have. If “Pty” is the only abbreviation at the end of the company name, then the company is a private unlimited company. Correspondingly, there is no limit on the personal liability of members in an unlimited company.
For more information about private companies, see here.
Ltd
Ltd stands for Limited. If “Ltd” is the only abbreviation at the end of the company name, then the “Ltd” indicates that it is a public company. Public companies are not restricted in the shares that they can issue and the amount of non-employee shareholders they can have. Indeed, this gives public companies greater capital raising potential than private companies. However, public companies may also have more obligations that they need to fulfill. Members of public companies have limited liability for company debts. Their liability is most often limited by shares.
Pty Ltd
Pty Ltd stands for Proprietary Limited. Accordingly, a proprietary limited company is a private company where the members have limited liability.
NL
While NL is not one of the acceptable abbreviations under section 601DB of the CA, the Australian Securities and Investments Commission (ASIC) indicates that it is one of the approved abbreviations for showing the legal status of the company. NL stands for No Liability. NL companies are public mining companies where members have no liability.
For more abbreviation about each legal status, see here.
Companies must make sure that they register their company with the abbreviation that correctly reflects their legal status. Otherwise, ASIC will have the discretion to investigate the breach of the CA.
Other abbreviations
There are several other abbreviations in section 601DB besides the abbreviations that indicate legal status in a company name. Each of these other abbreviations can be used in a company name, but are not required in the same manner as the abbreviations indicating legal status.
What should you do?
If you are trying to register your company, you should consult ASIC’s registration checklist before you do so.
It will also be helpful to consult a company lawyer regarding the appropriate legal structure for your company and the required abbreviations for that legal structure.
