In the Establish Legal and Risk Management module of our Small Business Management course you’ll how to choose the right business structure, how to set up a Pty Ltd business and, among others things, how to obtain an ABN. We’ve written previously about the different types of business structures in a four-part series of posts, starting with sole traders and working through to setting up trusts.
Company Registration with ASIC
If you decide to set up a company, you then need to register your company with the Australian Securities and Investments Commission (ASIC) (which is not like registering your business name with ASIC, though the two are often confused).
When you register a company with ASIC, you’re creating a legal entity, which is limited by shares. A company is also entitled to certain privileges, such as a corporate tax rate or limited liability.
When you set up a company, there are some downsides: your accounting fees will undoubtedly increase, you’ll have an annual ASIC fee and you’ll have to pay tax on your profits, which may not be capped or is without a threshold.
The upsides, however, include asset protection for yourself and the company directors, because you’re not liable for any debt that the business incurs, unlike a sole trader or partnership.
There are a couple of ways you can register your company:
- If it’s not your first time out of the batting cage, you can register your company with ASIC directly. ASIC offers an online lodgement service, which takes you through the entire process from deciding if a company structure is right for you, to ordering a commemorative record of registration. ASIC charges $444 to register a company.
- Registering a company is a lot like filing your own tax return: you need to know exactly what you’re doing, otherwise: trouble. So if you’re not confident that you’re completely au fait with all of your obligations you’re signing onto and need some help, you can enlist the help of a registered agent.
Finding ASIC Registered Agents
There was a time when you had to find a registered agent by calling around or pounding the pavement; when you did, they were expensive. That’s now changed, thanks to the interwebs. Online ASIC Registered Agents are a dime-a-dozen (or a ten-cent-coin-a-dozen, if you will) and the majority of them can register your company with ASIC in days for little more than the ASIC registration fee. In fact, the going rate seems to be around $499, though ASBC found that e-companies offer the most competitive price at $497, which includes all the relevant documentation.
If you’re thinking of setting up a company for your new business, registering it with ASIC is essential, but it need not be the daunting and expensive process it once was.