Company Setup Costs and Tasks in Australia: A Simple Guide to Business Registration (2024 UPDATE)

Are you captivated by the range of business opportunities in Australia, but feel lost in the maze of costs for starting a business? You’re not alone. Understanding the intricate landscape of company set-up costs in Australia can be difficult.

Delving into everything from business structures and legal requirements to initial costs, we aim to unpack everything involved. We will also outline the annual costs associated with maintaining a business. Through this straightforward guide, we’ll transform what might appear like a challenging journey into a clear, tangible plan.

We’ll further inspect the process of company setup, highlighting the steps to register your company, and the corresponding legal requirements. 

Benefits of Registering a Company 

Registering a company comes with a substantial amount of benefits. Undergoing incorporation means the business and owner become two separate entities, meaning any debts the business incurs are separate from the owner’s finances. Another advantage includes taxation benefits that come with registering a company. 

Limited Liability

Registering a company grants you limited liability, ,meaning you and your business are separate entities. Without registering your company, any business debts which fall due must be paid out of your own pocket as a sole trader. This is due to there being no separation between your personal finances and your business’s. Without limited liability, your business’s insolvency means you must personally pay off any business debts. 

Taxation Benefits

Registering your business comes with taxation benefits. As a sole trader, you are taxed as an individual, and any business profits form part of your income. The current tax rate for companies and small businesses is smaller than the tax rate imposed on individuals, meaning when you register a company, the taxes imposed on your business decrease.

Trading & Capital

Registering your company makes it easier for your business to raise capital and further develop your business. Private companies which are registered are still open to investors. Shareholders are also more inclined to invest in a registered company than those who operate as sole traders or in a partnership.

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Registering a Business Name 

Registering for a business name is done through ASIC. With an Australian Business Number (ABN), this process will only take around fifteen to twenty minutes. Failing to ensure the process of registering your business is compliant with ASIC can result in legal action taking place. 

As of July 2023, the cost to register a business name to an entity is $42 for a year.

Other possible costs include: 

• $59 to reserve a business name before registering for it. 
• $474 to omit the word ‘limited’ from the business name. 
• $1,433 to apply for consent from the Minister with business names that include restricted words such as ‘bank’, ‘university’ and ‘charity’. 

Trademarks

It is important to also conduct a trademark check through IP Australia to ensure the name is not registered as a trademark, as registering a name with ASIC does not necessarily mean you own it. At Lawpath, we offer a service that gives you your own trademark attorney and instant online applications, saving you the time and hassle of managing the complexities of trademark law. Registering for a business name through ASIC is helpful as it prevents your business from having the same name as an existing company. If you are currently at the stage of registering a business name, Lawpath offers a service that may assist you!

Company Incorporation Registration Cost

Registering a business and undergoing incorporation requires payment of a registration fee to ASIC. The costs are:

• $576 for proprietary and public companies that have shares.
• $474 for special purpose companies (public). 

Here at Lawpath, we aim to relieve business owners from the stress that may incur when registering a company. We offer business registration services that simplify the process ranging from $576 for a base charge and $744 for full compliance, including:

• An Australian company number.
• A company certificate.
• 13 company documents drafted for your company.
• An Australian Business Number (ABN).
• GST, PAYG & TFN.

Annual Fees of Maintaining a Company

Registering a business is not a one-time cost, there are annual fees to keep your business registered. ASIC issues annual reviews statements to all registered businesses which include costs which you must pay. It is important to pay these fees on time as paying them late will lead to incurring a late fee. 

As of 2023 annual review fees for different companies are:

• $310 for proprietary companies.
• $63 for special purpose companies (proprietary).
• $59 for special purpose companies (public).
• $1,440 for public companies.
• $1,440 for a corporate collective investment vehicle.

Additional Setup Costs for Businesses to Keep in Mind 

There are other costs for your business to keep in mind when incorporating your business when undergoing incorporation. These may not necessarily include legal fees, but could possibly encompass: 

• Registering for necessary licences and permits for your business type.
• The costs associated with expanding your business such as an increase in rent for a larger office and new equipment.
• Costs associated with marketing the business and conducting market research.
• Wages for new staff in response to scaling the business.

FAQS

What is an Australian Business Number (ABN) and how much does it cost?

An ABN is an 11-digit number that identifies your business to the government and community. An ABN is important for your business to have as it identifies your business to others when interacting with stakeholders such as through invoicing. Applying for an ABN is required for your business to undergo registration. Lawpath offers an affordable expedited ABN service which will guarantee a proper and secure application.

Why is it Important to be Compliant with ASIC?

Ensuring your business is compliant with ASIC is vital. The Corporations Act 2001 (Cth) and other legislation impose penalties where companies fail to comply with ASIC requirements, and so it is vital to do so. Here at Lawpath, we are dedicated to ensuring businesses are compliant with ASIC, which is why we offer an affordable subscription plan around ensuring your business is always compliant with ASIC.

What are the Main Benefits of Registering my Business?

The main benefits of registering your company is limited liability, taking advantage of taxation benefits and more efficient opportunities to raise capital. Once registration has taken place, you and your business would be two separate entities, meaning any debts the business could potentially incur are not paid from your own personal income.

Conclusion

The company setup costs and tasks one must complete when registering their business can be lengthy and complex. However, as explored in this article, there are many benefits that arise from registration. Ensuring your business is compliant with the steps required to undergo company registration is important to avoid legal complications. In conclusion, navigating the intricate process of company registration challenging. The peace of mind and legal protection it provides makes it a crucial step for any aspiring business director.