Here is our response to some questions we get asked frequently. The content of these pages is not meant to be exhaustive and although we have used our best efforts to be accurate, it may not be fully complete and correct.
You will certainly need more detailed answers or have additional questions not addressed here. Please do not hesitate to contact us via the Contact Us page to tell us more about your requirements.
What is Fair Trading?
The Fair Trading Department safeguards the rights of all consumers and advises businesses and traders on fair and ethical practice.
It provides services directly to individuals and businesses and is involved in the following activities:
- investigation of unfair practices;
- ensuring that the products sold in Australia are safe and meet their regulations and safety standards;
- registration of businesses, co-operatives and associations; and
- issuance of occupational licenses.
The Fair Trading Department has an office in each State and Territory.
More information is available from the ASIC website.
What is ATO?
The ATO stands for the Australian Taxation Office. It is the Australian Government’s principal revenue collection agency.
Australian companies’ dealings with the ATO include the following:
- registering for an Australian business number (ABN);
- registering for the goods and services tax (GST);
- ongoing employer obligations (pay as you go withholding, super guarantee, and fringe benefits tax);
- ongoing superannuation obligations;
- ongoing record keeping requirements; and
- lodgement of activity statements.
A company representative will interact with the ATO to ensure that the company’s ongoing obligations are fulfilled. This representative is called the Public Officer and is usually the company’s accountant or tax adviser.
More information is available from the ATO website.
What is ASIC?
ASIC stands for the Australian Securities and Investment Commission. It is Australia’s corporate, markets and financial services regulator.
ASIC’s responsibilities are as follows:
- maintain, facilitate and improve the performance of the financial system and entities in it
- promote confident and informed participation by investors and consumers in the financial system
- administer, enforce and give effect to the corporations law
- receive, process and store, efficiently and quickly, information that is given to ASIC by companies and other bodies; and
- make information about companies and other bodies available to the public.
Companies’ dealings with ASIC include the following:
- registering for an Australian company number (ACN) or Australian registered business number (ARBN); and
- ongoing record keeping and reporting requirements.
Company directors (or the company secretary when there is one) are responsible for ensuring compliance with the company’s regulatory requirements, which are enforced by ASIC.
More information is available from the ASIC website.
How to get investors in?
As your business is expanding, you may wish to grow by letting investors in and the best way to do so is by welcoming additional shareholders of your Pty Ltd. It is more difficult to benefit from new investors without having created a legal entity in which they can participate.
Issuing new shares or transferring existing shares are the ways to get new investors in as shareholders. The share issue is a slightly more complex process but may be favoured in circumstances where stamp duty is payable on the transfer of shares of the Pty Ltd due to the State in which it has been registered.
In any case, it is strongly recommended to review (and amend if required) the terms of the constitution (if the Pty Ltd has one) or to prepare a shareholders’ agreement to deal with the allocation of rights and responsibilities between the shareholders and provide mechanisms which will be used to deal with the departure of, or dispute between, the existing shareholders and the entry of new shareholders into the Pty Ltd.
How to start doing business?
Once you have obtained your Australian Company Number from the Australian Securities and Investments Commission (ASIC), you will need to apply for an Australian Business Number with the Australian Tax Office (ATO).
If you are trading in your own name, you can apply for an ABN to the ATO directly.
The ABN is the tax registration number allowing individuals and companies to start doing business in Australia (i.e., buy and sale goods and services, issue invoices, pay taxes etc).
More information is available from the ATO website, which you can access from the contact us page.
How to open a bank account?
There are Australian banks, which partner with European banks to offer better services and account management to customers trading in Europe and Australia. Local representatives usually have good relationships with one or several Australian banks, which they can recommend to their clients. Visit Bilateral Solutions websitefor more information.
To open a bank account in the name of your Pty Ltd, you will need to provide the Australian Business Number that the Pty Ltd received from the Australian Tax Office, as well as the certified copy of the registration documents of the Pty Ltd (e.g., certificate of registration, constitution and legal register). The list of documents required may vary from one bank to another.
What are the on-going obligations of a Pty Ltd?
The on-going obligations of a Pty Ltd are minimal and include the following:
- annual review of the ASIC Company Statement on or around the anniversary of the registration of the Pty Ltd;
- payment of the ASIC Annual Review Fee (currently AUD 240); and
- notification of changes to the registration details of the Pty Ltd (e.g., change of address or directors) and update of the legal register as a result.
There is no requirement to convene an annual general meeting of shareholders to review and approve the annual financial statements of the Pty Ltd. It is enough to hold a meeting of the Board of Directors for this purpose.
A Pty Ltd with foreign shareholders may have to lodge a copy of its annual audited financial statements with ASIC unless it can qualify for an exemption as a small Pty Ltd not part of a large group.
What to set up and how
As far as the selection of the legal vehicle you will use to pursue your activities is concerned, several choices are available. You may wish to do business as a sole trader:
- in your own name, in which case you will need to apply for an Australian Business Number (ABN) from the Australian Tax Office in your name, or
- under a different name, in which case you will need to register a Business Name (BN) with the Fair Trading Department.
You may decide to trade through an unincorporated partnership or joint venture, in which case you will need to enter into a partnership agreement or cooperation agreement with your partner(s) to document the terms of your agreement.
If you intend to do business via an incorporated legal entity, you will need to decide whether you register an Australian branch of your existing foreign company or an Australian proprietary company (Pty Ltd), either as a subsidiary of your existing foreign company or as an independent legal entity.
A Pty Ltd is an Australian proprietary company registered to do business in Australia and governed by its Constitution (when there is one) or the replaceable rules of the Corporations Act 2001 (Cth). A Pty Ltd is given a unique 9-digit registration number, the Australian Company Number (ACN).
A Pty Ltd is simple, inexpensive and quick to set up. The only mandatory legal requirements are one shareholder (which can be a foreign individual or company), one director residing in Australia, a local address for the registered office and principal place of business, and a share capital of one share of any value. There is no specific scope of activity that needs to be chosen by the Pty Ltd at the time of registration. Its constitution will not need to provide for a restricted list of permitted activities. It will however be necessary to choose a field of activity at the time of applying for an Australian Business Number with the Australian Tax Office in order to start doing business. See the How to start doing business for more information.
Several legal documents need to be prepared, including the application for registration which needs to be lodged with the Australian Securities and Investments Commission (ASIC) together with the payment of the registration fees. It is a legal requirement for the Pty Ltd to maintain a legal register containing all these legal documents and allow shareholders, creditors and regulatory bodies to inspect such register.
On-going legal obligations of a Pty Ltd are limited and easy to manage. See the What are the on-going obligations of a Pty Ltd for more information.
A branch is the Australian arm of a foreign registered company, which is registered to do business in Australia. It is not a separate legal entity as such. A branch is given a unique 9-digit registration number, the Australian Registered Body Number (ARBN).
Compared to a Pty Ltd, a branch is more complex, more expensive and longer to set up. To register a branch, it is necessary to lodge:
- legal documents demonstrating the existence and registration details of the foreign company to which the branch relates, including the certificate of registration and constitution of the foreign company, and
- a memorandum of appointment of the local agent, who will represent the foreign company through the branch in Australia.
Any documents which are not in English must be translated into English and the translation must be certified to be a correct translation by a translator accredited by ASIC.
On-going legal obligations of a branch are extensive and include the requirement to lodge a certified copy of the annual financial statements of the foreign company, which need to be translated by an accredited translator if they are not in English.
Company registration form for you to download, fill out and return to us :
What is Fair Work Australia?
Fair Work Australia is the national workplace relations tribunal. It is an independent body with power to carry out a range of functions relating to:
- the safety net of minimum wages and employment conditions ;
- enterprise bargaining ;
- industrial action ;
- dispute resolution ;
- termination of employment ; and
- other workplace matters.
Fair Work Australia is part of Australia’s national workplace relations system which also includes the Fair Work Ombudsman and the Fair Work divisions of the Federal Court of Australia and the Federal Magistrates Court of Australia. Fai Work Australia operates under the Fair Work Act 2009.
The Fair Work Ombudsman is a statutory office created by the Fair Work Act 2009. The Fair Work Ombudsman’s functions include promoting harmonious, productive and cooperative workplace relations and ensuring compliance with Commonwealth workplace laws. The services of the Fair Work Ombudsman are free to all workers and employers in Australia. In exercising these functions, the Fair Work Ombudsman:
- offers people a single point of contact for them to get accurate and timely information about Australia’s workplace relations system;
- educates people working in Australia about fair work practices, rights and obligations;
- investigates complaints or suspected contraventions of workplace laws, awards and agreements;
- litigates to enforce workplace laws and deter people from doing wrong in the community; and
- builds strong and effective relationships with industry, unions and other stakeholders.
More information is available from the Fair Work Australia website. Please see link inContact Us page.