Choose The Right Business Structure
The first important thing you need to do when setting a company in Australia is determining the business structure. However, you first need to determine whether you will run the business via an offshore entity or an Australian entity. Both of these options have their pros and cons. It is upon you to choose an option that will give the best outcome for your business.
Once you have determined how your business will run, the next important thing is choosing a business structure. Common types of business structure include:
- An incorporated or unincorporated joint venture
- Public company
- Proprietor private company limited
The most popular business structure used by a new business venture in the Australian market is the proprietary company limited by shares.
How To Establish A Propriety Private Company Limited In Australia
Establishing a propriety private company limited by shares in Australia is relatively simple and can be done quickly. The process will only take 1 business day and will cost you AUS $900, which caters to a set-up fee and professional fee for advice for the registration process.
Determine The Company’s Name
When registering a company in Australia, you need to determine its name. However, before you settle on a name for your company, you need to ensure that it does not trespass any intellectual property right of third parties. Once the registration process is complete, you will be given an Australian company number (a nine-digit number). The company name and Australian company number should always appear on all public documents.
Determine The Minimum Share Capital
There is no minimum share capital requirement in Australia for Pty limited companies. This means that companies are at liberty to determine their minimum share capital investment.
Appoint Company Directors
When it comes to appointing directors for the company, one of the directors must reside in Australia. The director should also be a neutral person and must have attained the age of 18 years.
Appoint Company Secretaries
The company should also appoint secretaries. If the company fails to do so, then each director of the company will be liable for breach of secretary responsibilities.
Appoint A Public Officer
The company should also appoint a public officer who will ensure that the company meets all its tax obligations.
Open A Local Store
The company may buy the building where they plan to conduct their business or may enter into a lease agreement. If you choose to enter into a lease, ensure you seek legal advice to ensure that the entire process is conducted correctly. On the other hand, if you choose to purchase the entire premise, then you should check whether foreign investment restrictions apply. In some cases, you may need approval from the Foreign Investment Review Board before acquiring a real estate property.
Employing Australian Employees
If you decide to employ Australian workers, you need to take note of the following:
The Applicable Law
Australian laws regarding industrial relations keep on changing. The company needs to familiarize itself with these laws to avoid landing on the wrong side of the law. There is a wide range of laws that a company needs to comply with when hiring Australian employees including state and territory laws, tax legislation, and superannuation.
Although no law compels companies to engage with employees in a certain way, it is wise to have an appropriate agreement when engaging new employees. This includes having a well-negotiated enterprise agreement or individual employment agreement. To minimize the risk of liability, an individual employment contract should include standard conditions of employment, employer protection clauses, termination of employment provisions, leave entitlements, and responsibilities. Failure to have a written agreement with an employee, especially on matters concerning contract termination may force the employer to provide termination notice in advice, making the entire process more costly to the employer.
Safety Laws And Occupational Health
All Australian territories and states have Occupational Health Safety (OHS) legislation that imposes specific obligations on companies regarding staff employment and welfare. All companies are required to take care of their employee’s health, the safety of their employees at work. Failure to comply with the relevant OHS Act may attract large fines.
The company will be at risk of liabilities if it fails to comply with relevant statutory that have been put in place. For instance, the company should ensure that employment contracts are terminated lawfully under the principles of fairness. The employer should also adopt fair and reasonable disciplinary procedures.
The company should put in place workplace procedures that protect the welfare of its employees. These policies include this dealing with sexual harassment, bullying, anti-discrimination, and grievance procedure. The company should avail those policies to employees.
Utilizing The Services Of Overseas Employees
If the company decides to use the services of employees who are not Australian nationals or permanent residents, the company must comply with all relevant migration laws and procedures. Under Australian law, it is a criminal offense to recklessly or knowingly allow individuals who don’t have permission to work in your company. The company and individuals found guilty of these offenses risk a jail term of up to 2 years. If you intend to employ non-Australian citizens in your company, it is important to seek migration law advice.
Registration, Taxation, And Reporting Obligations
The company must get a Tax File Number from the Australian Tax Office. Additionally, the company should comply with reporting obligations as required to various regulatory bodies such as ASIC, ATO among many others.
Tax Remittance And Obligations
The company must comply with a wide range of tax obligations that relate to corporate tax, including pay as you go. Corporate tax is 30% for all companies. Other important tax obligations to take not off include duties and excise, including stamp duty, good, and services tax, and capital gain tax. Remember that the income tax year in Australia begins from 1 July – 30 June.