Olivia is the Head of Legal at Lawpath, where she helps Australian businesses navigate complex legal challenges with practical, commercially minded advice. She specialises in employment matters, contract drafting, pre-litigation strategy, dispute resolution, commercial law and startup compliance, and has supported clients across technology, healthcare, professional services and retail. Olivia is passionate about making legal services accessible, personable and effective for every client.
An unlisted public company is an Australian public company (its name ends in “Limited” or “Ltd”) whose shares aren’t quoted on a stock exchange like the ASX. It can have as many shareholders as it likes and can offer shares to the public. The trade-off is heavier governance than a Pty Ltd: three directors, a company secretary, an auditor and an annual general meeting.
Most founders land here for one of two reasons. An investor or adviser has floated the idea of “going public without listing”, or the company is creeping towards the 50-shareholder cap and someone has started to sweat. Both are good problems to have. Neither needs a rushed decision.
- Public doesn’t mean listed. An unlisted public company is a “Ltd” company that sits outside the ASX, so there are no listing rules and no market for its shares.
- No shareholder cap. A Pty Ltd is limited to 50 non-employee shareholders. An unlisted public company has no limit.
- The minimum team is bigger. You need at least three directors (two ordinarily resident in Australia) and an Australian-resident company secretary.
- Reporting is annual, not half-yearly. Most unlisted public companies lodge one audited financial report a year, within four months of year end, and hold an AGM within five months.
- Crowdfunding alone isn’t a reason to convert. Eligible Pty Ltd companies have been able to use crowd-sourced funding since 2018.
What is an unlisted public company in Australia?
Australian law gives you two company types. A proprietary company (“Pty Ltd”) is built for closely held businesses. A public company (“Ltd”) is built for wider ownership. Public companies then split into two camps: listed (quoted on the ASX or another exchange) and unlisted.
So a non-listed public company, a public unlisted company and an unlisted public company are all the same thing. Different search terms, one structure.
Here’s the bit that trips people up. “Unlisted” doesn’t mean “private”. Every Pty Ltd in the country is unlisted too, because proprietary companies can’t list. When someone says “unlisted company” they could mean either. When they say “unlisted public company” they mean a Ltd company that has chosen not to list.
One more wrinkle. A company limited by guarantee is also an unlisted public company. That’s the structure most charities, clubs and industry associations use. It has no shares, so members guarantee a small fixed amount instead of buying equity. This article focuses on the commercial version: a public company limited by shares that wants to return profits to its shareholders.
How is an unlisted public company different from a Pty Ltd or a listed company?
Think of it as the middle rung. You get the open ownership of a public company without the cost and scrutiny of an exchange listing. Here’s how the three compare side by side.
| Pty Ltd | Unlisted public company | Listed public company | |
|---|---|---|---|
| Name ends in | Pty Ltd | Ltd or Limited | Ltd or Limited |
| Shareholder limit | 50 non-employee shareholders | No limit | No limit |
| Minimum directors | One (ordinarily resident in Australia) | Three (two ordinarily resident) | Three (two ordinarily resident) |
| Company secretary | Optional | Required, Australian resident | Required, Australian resident |
| Offer shares to the public | Only through crowd-sourced funding or an exempt offer | Yes, with a disclosure document or exemption | Yes, through the exchange |
| Audit | Only in specific cases (large companies, some crowdfunded companies) | Yes | Yes |
| Financial reports to ASIC | Only in specific cases | Annual, within four months of year end | Annual within three months, plus half-year reports |
| Annual general meeting | Not required | Required, within five months of year end | Required |
| Members’ circulating resolutions | Allowed | Not allowed | Not allowed |
| ASX listing rules and continuous disclosure | No | No | Yes |
| Takeover rules | Generally no | Yes, once it has more than 50 members | Yes |
| Related party benefit rules | No | Yes | Yes |
The last two rows are the ones nobody mentions at the start. We’ll come back to them, because they change how founders run the business day to day.
What rules does an unlisted public company have to follow?
The core obligations come from the Corporations Act 2001 (Cth). None of them are hard on their own. The challenge is that there are more of them, and they run on a fixed annual clock.
A bigger board and a company secretary
You need at least three directors, and at least two must ordinarily live in Australia. Every director needs a director ID before they’re appointed. You also need at least one company secretary who ordinarily lives in Australia.
For a two-founder business, that third director is the first real hurdle. Pick someone who adds judgement to the board, not just a name to fill the seat. They carry the same legal duties as you.
An auditor and one audited report a year
An unlisted public company must appoint a registered company auditor, prepare an annual financial report and directors’ report, and lodge them with ASIC. If it isn’t a disclosing entity, the deadline is four months after year end.
You’ll see older articles claim public companies report twice a year. That’s only true for disclosing entities, such as listed companies or companies that have made certain public offers. ASIC sets out the full picture in its reporting obligations for public companies. Small companies limited by guarantee get lighter rules, but commercial companies limited by shares don’t.
An AGM and proper meetings
You must hold an annual general meeting at least once each calendar year, within five months of your financial year end. The only exception is a public company with a single member.
Members’ decisions also need a meeting. A Pty Ltd can pass a shareholder resolution by getting everyone to sign a document. An unlisted public company can’t. Directors can still use circulating resolutions for board decisions, so the board side stays flexible.
Shareholders also hold a statutory right to remove a director by ordinary resolution. Your constitution can’t take that away. If you’re a founder director holding less than half the votes, factor that in before you convert.
Related party and takeover rules
This is where founders get caught. A public company can’t give a financial benefit to a related party (a director, their spouse, or an entity they control) without member approval, unless an exception applies. Arm’s length terms and reasonable director pay are the usual exceptions.
In a Pty Ltd, it’s common for a founder’s other company to invoice the business for consulting work or rent. In an unlisted public company, that same arrangement needs to clear the related party rules. Sort it out before conversion, not after an investor asks about it.
Takeover rules also apply once an unlisted company has more than 50 members. Above that line, nobody can move past 20% voting power except through an approved pathway. That matters if a founder or early investor plans to buy out smaller holders later.
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Why would you choose an unlisted public company over a Pty Ltd?
Honestly? Most small businesses shouldn’t. A Pty Ltd is cheaper to run and simpler to manage, and it suits the overwhelming majority of Australian companies. An unlisted public company earns its extra cost in a handful of situations.
- You need more than 50 shareholders. Community-owned ventures, investor syndicates and businesses with a loyal customer base that wants a stake all hit the cap quickly.
- You want to raise from the general public with a prospectus. Only a public company can run a full public offer outside the crowd-sourced funding regime.
- You’re preparing for an IPO. A year or two as an unlisted public company lets you build the board, audit history and governance habits that an exchange will expect.
- Institutional investors or major customers expect it. Audited accounts and a formal board can make due diligence faster.
Notice what isn’t on the list: “it sounds more impressive”. The “Limited” in your name won’t win you a contract. The audit bill will arrive every year regardless.
How does an unlisted public company raise money?
Being public lets you offer shares to anyone. It doesn’t let you skip the paperwork. Unless an exemption applies, an offer to the public needs a disclosure document, usually a prospectus lodged with ASIC. Our guide to disclosure documents for raising capital covers each type.
Most smaller raises use one of these routes instead:
- Small-scale personal offers. Offers to people you have a connection with, capped at 20 investors and $2 million in any 12-month period.
- Sophisticated and professional investors. Offers to investors who meet the wealth or experience tests in section 708 don’t need a prospectus.
- Crowd-sourced funding. A licensed CSF platform hosts a simpler offer document. Your company needs less than $25 million in gross assets and less than $25 million in annual revenue, and you can raise up to $5 million in any 12 months.
That last route is where the original version of this article went wrong, and plenty of others still do. Crowd-sourced funding was opened up to eligible proprietary companies in 2018. Shareholders who come in through a CSF offer don’t count towards the 50-shareholder cap. A crowdfunded Pty Ltd does take on extra reporting, and its accounts need an audit once it has raised $3 million or more through CSF.
So if crowdfunding is your only reason to go public, compare the two paths first. Staying a Pty Ltd is often the cheaper option.
Watch your marketing too. The Act restricts advertising an offer of securities that needs a disclosure document. A cheerful LinkedIn post announcing “we’re raising, DM me” can cross that line. Get the offer structure settled before anyone hits publish. For the bigger picture, read our capital raising guide for entrepreneurs.
How do you set up or convert to an unlisted public company?
You can register a company as public from day one, but most founders convert an existing Pty Ltd once growth demands it. Either way, the sequence looks like this.
- Confirm you need it. Map your shareholder count, capital plan and exit timeline. If a Pty Ltd with a CSF raise gets you there, stop here.
- Build the board. Line up three directors (two resident in Australia) and a resident company secretary. Make sure every director has a director ID.
- Replace your constitution. A constitution drafted for a proprietary company won’t fit. You’ll need one that covers public company meetings, share issues and transfers. See how a company constitution compares with the replaceable rules before you decide.
- Pass a special resolution. Shareholders approve the change of company type by at least 75% of votes cast. Then lodge the application with ASIC, and your name changes from “Pty Ltd” to “Ltd”.
- Appoint an auditor. Do it straight away so the auditor can plan your first year-end.
- Set your compliance calendar. Diarise report lodgement (four months after year end), the AGM (five months), and your annual ASIC review date.
Sometimes conversion isn’t optional. If a Pty Ltd ends up with more than 50 non-employee shareholders, it’s breaching the Act, and ASIC can direct it to convert. Employee shareholders don’t count towards the cap, and neither do former employees who got their shares while employed. Here’s more on how many shareholders a public company can have.
Where do founders get unlisted public companies wrong?
The law is clear enough. The mistakes happen in the gap between “we converted” and “we changed how we operate”. These come up again and again.
Treating it as a name change. Conversion is a governance change. Board meetings need minutes, member decisions need meetings, and the related party rules apply from the day ASIC updates your registration.
Forgetting there’s no market for the shares. Investors in an unlisted public company can’t sell on the ASX. They sell privately, usually back to existing holders, and price depends on your last raise or a valuation. Spell out transfer rights, pre-emptive rights and exit terms in a shareholders agreement before your next round. A frustrated minority holder with no exit is a headache you can avoid.
Underbudgeting the running costs. The audit, company secretary, AGM and extra legal review add up every year. Get quotes first. If the numbers make you wince, a Pty Ltd may still be the right home for now.
Assuming “public” means investors get a free ride on information. Unless you become a disclosing entity, there’s no continuous disclosure obligation. Members get the annual report and the AGM. Anything more is up to you and your shareholder agreement.
Unlisted public company FAQs
Can a public company be unlisted?
Yes. Listing is a separate step. A company becomes public by registering or converting with ASIC, and only becomes listed if it applies to and is admitted by an exchange like the ASX. Plenty of Australian public companies never list.
Are all public companies listed?
No. Listed companies are a subset of public companies. Unlisted public companies include commercial businesses limited by shares, plus most charities, clubs and associations set up as companies limited by guarantee.
What’s the difference between an unlisted company and an unlisted public company?
“Unlisted company” covers any company not quoted on an exchange, including every Pty Ltd. An unlisted public company is specifically a Ltd company that isn’t listed. It has no shareholder cap and stricter governance than a Pty Ltd.
How many shareholders can an unlisted public company have?
There’s no upper limit, and it can operate with just one. Once it passes 50 members, takeover rules apply to any acquisition that would take someone above 20% voting power.
Does an unlisted public company need an auditor?
Yes, if it’s limited by shares. It must appoint a registered company auditor and lodge an audited annual financial report with ASIC within four months of year end. Small companies limited by guarantee get some relief.
Can an unlisted public company use crowd-sourced funding?
Yes, if it has less than $25 million in gross assets and less than $25 million in annual revenue. It can raise up to $5 million in any 12 months through a licensed platform. Eligible Pty Ltd companies can do the same.
Can I sell my shares in an unlisted public company?
Yes, but privately. There’s no exchange, so you’ll need a buyer, usually an existing shareholder or the company itself. The constitution or shareholders agreement often requires board approval or offering shares to existing holders first.
What liability do shareholders have in an unlisted public company?
Limited liability applies. If the company becomes insolvent, a shareholder’s exposure is capped at any amount still unpaid on their shares. Fully paid shares mean no further liability for company debts.
Is an unlisted public company right for you?
If you’ve read this far and you’re still unsure, that’s completely normal. This is a structural decision most founders make once, and the right answer depends on your shareholder plans more than your size. You don’t need everything figured out today. You need someone to check your numbers and tell you which path is cheaper to run.
A Lawpath lawyer can review your structure, constitution and raise plans in one go, for a fixed fee you’ll know upfront. Get a fixed-fee quote from a Lawpath lawyer today.
