In this article, we will advise you on the steps to be taken and costs involved to set up and to register a company. We will also give advice about your legal obligations as a company director and company officers.
Steps to incorporate a company:
There are a few things for you to consider before incorporating a company. This include whether a company is the right business structure, choosing a company name, decide how the company operate, understanding the legal obligation of a company and its officeholders, gathering consent of persons involved in the company before registering a company.
At this stage, you should make sure that you have fully understand what your legal obligations will be if you become a company officeholder. Once you register your company in Australia with the Australian Securities and Investments Commission (ASIC), your company can conduct business throughout Australia without the need to register in individual states and territories (s117 Corporations Act 2001). However please note that your registered business name would not be the same as registering a company. Registration or use of a business name does not create a legal entity (only when registering a company) or allow the use of privileges to which a company is entitled.
Reserving your company name:
It is common practice for someone to register their business as Pty Ltd. The word ‘Pty Ltd’ is the abbreviation of ‘Proprietary Limited’. This means that the liability of the company’s members is limited to the amount unpaid on their shares. A company would come into existence at the beginning of the day on which it is registered (s119 Corporations Act 2001) until it is deregistered (Chapter 5A Corporations Act 2001).
It is important to check your business name availability and to see whether your chosen business name has been previously registered. By doing so, you would need to check if your proposed business name is similar or identical to any other registered business or pending trademarks through the ‘check the IP Australia website’. This is because even if you reserve or register a name for your company, person or corporation with similar registered name may still take action against you. Therefore to prevent this, it is your responsibility to be aware of any problems that might arise for your business name to be similar or likely to confuse from names already registered elsewhere.
Please note it is not necessary for you to give your company a name. You can use your Australian Company Number (ACN) as the name of your company name instead (s118 Corporations Act 2001).
In addition, you can reserve your business name by using form 410. This is to make sure that another person would not take your intended business company name before you register its business name. Once the ASIC approve your company name, they will reserve the name for you for two months. You may however apply to extend the two-month period by lodging another application with a fee. The second application must be lodged before the first two-month reservation period has elapsed. However ASIC would not indefinitely reserve a company name if that prevents other people to use the company name legitimately.