A company is included within the broader legal definition of a corporation. Companies are registered with the Australian Securities and Investments Commission (ASIC). A corporation is not generally a separate Australian business structure that founders choose instead of a company. The meaning of "corporation" differs between countries, particularly the United States. When choosing a business structure in Australia, compare company, sole trader, partnership, and trust—not "company versus corporation."
- A company is included within the broader legal definition of a corporation.
- Companies are registered with the Australian Securities and Investments Commission (ASIC).
- A corporation is not generally a separate Australian business structure that founders choose instead of a company.
- The meaning of "corporation" differs between countries, particularly the United States.
- When choosing a business structure in Australia, compare company, sole trader, partnership, and trust—not "company versus corporation."
Many people use the terms company and corporation interchangeably. In Australia, however, they are not legally identical. A company is a specific type of legal entity, while a corporation is a broader legal concept under Australian law.
Understanding this distinction can help you choose the right business structure and avoid confusion when reading overseas business advice.
What is the difference between a corporation and a company in Australia?
In Australia, the key difference is that a company is a specific type of legal entity, whereas a corporation is a broader legal category under the Corporations Act 2001 (Cth).
At a high level, section 57A of the Corporations Act provides a statutory definition of "corporation". That definition includes companies registered under the Act, as well as certain other bodies corporate. In some circumstances, it also includes other bodies that meet the statutory criteria.
This means:
- Every Australian company falls within the broader concept of a corporation.
- Not every corporation is necessarily a company.
- A corporation may include other bodies corporate and certain other legal bodies recognised under the legislation.
- "Company" and "corporation" are not two equivalent business structures that founders choose between.
For most Australian business owners, the practical decision is whether to operate as a sole trader, partnership, trust or company. "Corporation" is primarily a legal term rather than a separate registration option.
Here is a quick overview of the differences:
| Company | Corporation |
|---|---|
| Specific legal entity/type | Broader legal category |
| Registered as a company under the Corporations Act | Includes companies and certain other bodies |
| Registered with ASIC | Encompasses entities beyond ASIC-registered companies |
| Common business structure founders choose | Broader statutory/legal term |
Importantly, the distinction has nothing to do with business size. A company doesn’t become a corporation simply because it grows or lists on the share market.
What is a company?
A company is a separate legal entity that is registered with ASIC. Once registered, the company exists independently of its owners.
This means it can:
- Own assets in its own name.
- Enter into contracts.
- Borrow money and incur debts.
- Sue and be sued.
- Continue operating even if ownership changes.
A company is generally owned by its members (shareholders) and managed by directors and other officers, who have legal duties under the Corporations Act.
Each registered company has an Australian Company Number (ACN), which identifies it as such.
What is a corporation?
A corporation is a broader legal concept used in the Corporations Act.
The statutory definition can include:
- A company
- Another body corporate
- Certain unincorporated bodies that meet the requirements of the legislation
For most small business owners, the important takeaway is that a corporation is an umbrella legal term rather than a distinct type of entity that you register.
Keep in mind that a corporation is not simply a company that has become large, employs hundreds of staff, or has expanded internationally.
Instead, a company is a corporation from the time it is properly registered under the Corporations Act, regardless of its size.
Is every company a corporation?
Yes.
A company registered under the Corporations Act falls within the statutory definition of a corporation.
This means that every Australian proprietary company (Pty Ltd) and every Australian public company is also a corporation for the purposes of the legislation.
Is every corporation a company?
No.
Although every registered company is a corporation, the legal definition of corporation extends beyond companies. Because the legislation also recognises certain other bodies corporate and other qualifying bodies, not every corporation is necessarily an ASIC-registered company.
For most Australian founders, these distinctions rarely affect day-to-day business decisions.
Is a corporation a separate business structure in Australia?
Generally, no.
When Australians choose a business structure, the standard options are sole trader, company, partnership, and trust.
By contrast, corporation is a broader legal term that includes companies and certain other legal entities recognised under the Corporations Act.
If you’re deciding how to set up a business, the more useful comparison is between the recognised business structures rather than choosing between a company and a corporation.
Is a Pty Ltd company a corporation?
Yes.
A Pty Ltd company is a proprietary company registered under the Corporations Act. Because it is a registered company, it also falls within the broader legal definition of a corporation.
A proprietary limited company typically entails:
- Registration with ASIC
- Separate legal personality
- Limited liability for shareholders
- Its own legal rights and obligations
Pty Ltd doesn’t change a company’s status as a corporation; it simply identifies the particular type of company.
Is a public company also a corporation?
Yes.
A public company is still a company registered under the Corporations Act, which means it’s also a corporation.
This is an important distinction because many people incorrectly assume that businesses become "corporations" only after listing on the Australian Securities Exchange (ASX) or attracting many shareholders.
That’s not true.
The difference between a proprietary company and a public company lies in their legal requirements, fundraising capabilities, and governance obligations. It’s not a distinction between a company and a corporation.
Does company size determine whether it is a corporation?
No.
Company size doesn’t affect whether it’s a corporation. A small, family-owned company with one shareholder is still a corporation because it is registered under the Corporations Act.
Likewise, a multinational enterprise remains a company regardless of its scale, although different regulatory requirements may apply depending on its company type and reporting obligations.
The following assumption is therefore incorrect:
- Small = company
- Large = corporation
Instead, every registered company falls within the broader concept of a corporation from the outset.
Is a company the same as a business?
No.
A business is the commercial activity that is carried on.
A company is the legal entity that may own and operate the business.
A business name is simply the name under which an entity trades.
These concepts are often confused, but they are legally distinct.
| Company | Business name | Sole trader |
|---|---|---|
| Separate legal entity | Trading name only | An individual operating the business |
| Registered with ASIC | Registered with ASIC, but does not create a legal entity | Not separate from the owner |
| Can own assets and enter into contracts | Does not create legal rights separate from the owner | The owner personally owns business assets and liabilities |
Registering a business name doesn’t create a company or establish a separate legal entity.
What is the difference between a company and a body corporate?
A body corporate is another broad legal concept.
A company is one type of body corporate, but the term "body corporate" may also encompass other incorporated entities, depending on the legislation in question.
The Corporations Act distinguishes between companies and other bodies corporate in various contexts, so the two terms are not always interchangeable.
Does the term "corporation" mean something different overseas?
Yes.
Business terminology varies significantly between countries.
In particular, US business resources often use "corporation" as the primary term for an incorporated business entity. This is one reason online explanations of "company versus corporation" can appear inconsistent.
In Australia, however, the legal framework is different. The Corporations Act uses "corporation" as a broader statutory term that includes companies rather than treating it as a separate business structure.
Should you register a company or a corporation in Australia?
If you are starting a business in Australia, the question is usually whether a company is the right business structure, not whether you should register a corporation instead.
As mentioned earlier, you’ll need to compare the four main available structures:
- Sole trader
- Partnership
- Trust
- Company
The most appropriate structure depends on factors such as:
- Liability protection
- Ownership arrangements
- Taxation;
- Administrative obligations
- Future growth plans
- Bringing in investors or shareholders
- Establishment and ongoing compliance costs
Choosing the right structure should take into account your particular business goals and circumstances. If you’re uncertain, obtain legal or accounting advice before registering a company so that you can select the most suitable option with confidence.
FAQs
Is a company a corporation in Australia?
Yes. Every company registered under the Corporations Act falls within the broader legal definition of a corporation.
Is every corporation a company?
No. The statutory definition of corporation extends beyond companies to include certain other bodies recognised by law.
Is Pty Ltd a company or corporation?
A Pty Ltd is a proprietary company registered with ASIC and is therefore also a corporation.
What does corporation mean in Australia?
Corporation is a broad legal term under the Corporations Act that includes companies and certain other bodies.
Is a corporation a business structure in Australia?
Generally, no. The standard business structures are sole trader, company, partnership, and trust.
What is the difference between a company and a business?
A company is a legal entity. A business is the commercial activity carried on by that entity or another business structure.
What is the difference between a company and a body corporate?
A company is a specific type of legal entity, whereas a body corporate is a broader legal concept that encompasses companies and other incorporated entities.
Is a public company a corporation?
Yes. A public company is a company under the Corporations Act and therefore also a corporation.
Can a sole trader be a corporation?
No. A sole trader is an individual operating a business and is not a separate legal entity or corporation.
What is the difference between incorporated and Pty Ltd?
"Incorporated" broadly refers to an entity that has become a separate legal entity. Pty Ltd specifically refers to a proprietary limited company registered under the Corporations Act.
