Is a company right for your business?
A proprietary limited company (Pty Ltd) is the most common vehicle for Australian businesses that want limited liability, clean ownership, and investor readiness. Before you incorporate, compare it with alternatives and confirm tax and governance settings.
When a company makes sense
- You want limited liability and to separate business risk from personal assets
- You plan to add investors, issue shares or run an ESOP
- You need credibility for tenders, enterprise customers or export
- You want clear ownership, sale and exit options
When to consider other options
- Very small side business with minimal risk (sole trader)
- Professional practice or family distribution goals (trust with corporate trustee)
- Short-term project with simple revenue sharing (partnership, with caution)
Ask a lawyer which structure fits your goals
Important: The best structure depends on your facts, state or territory laws, tax profile and industry rules. This page is general information only.
Compare common business structures
Here is a high-level comparison. If you need a tailored recommendation, ask for a quick call and a fixed-fee quote.
| Structure | Liability | Tax & ownership | Set-up complexity | Best for |
|---|---|---|---|---|
| Company (Pty Ltd) | Limited to company assets | Company tax; shares and classes allow investors and ESOP | Moderate | Growth businesses, taking on capital, clearer exit |
| Sole trader | Unlimited personal liability | Personal tax; no equity structure | Low | Testing ideas with low risk |
| Trust + corporate trustee | Trust assets protected; trustee is a company | Flexible distributions to beneficiaries | Higher | Family businesses and asset protection planning |
| Partnership | Partners can be jointly liable | Flow-through; simple but risky | Low–moderate | Short-term collaborations (with a robust agreement) |
Company setup costs and timelines
Typical costs (AUD)
- ASIC company registration fee: typically in the mid-$500s (indexed each 1 July)
- Company constitution or replaceable rules: $0–$1,200 (custom drafting costs more)
- Shareholder agreement (if >1 shareholder): ~$1,500–$5,000 depending on complexity
- Trust deed (if using trust + corporate trustee): ~$500–$2,000
- Registered office / ASIC agent: $0–$400 per year
- ABN/GST/PAYG registrations: often included in fixed-fee packs
- Trade mark filing (optional): official fees from ~$250–$400 per class plus advisor fees
- Annual ASIC review fee (proprietary company): commonly around the low $300s (indexed)
How long it takes
- Director ID: usually same day online if identity checks are ready
- ASIC incorporation: same day once information is confirmed
- ABN/GST: immediate if auto-approved; some cases take a few days
- Bank account: varies by bank; allow a few business days
- Shareholder agreement: 2–10 business days depending on negotiation
Note: Government fees change periodically. Confirm current amounts before you proceed.
Legal setup steps (Australia)
| Stage | What usually happens |
|---|---|
| Plan the structure | Confirm a company is right for you; map founders, investors, vesting and exit goals. |
| Director ID | Each director obtains a Director ID from the ABRS before appointment. |
| Name and governance | Check name availability with ASIC; choose constitution vs replaceable rules; set share classes. |
| Registered office and officers | Nominate registered office and principal place of business; appoint at least one Australian-resident director. |
| Lodge incorporation | Prepare consents and Form 201 (or online equivalent); receive ACN and certificate of registration. |
| Tax registrations | Apply for ABN, TFN, GST (if required), PAYG withholding and any state payroll tax. |
| Banking and records | Open a company bank account; issue share certificates; update registers; minute director/shareholder resolutions. |
| Agreements and IP | Complete shareholder agreement, founder/employee IP assignment, contractor and supply terms; consider trade marks. |
| Licences and policies | Industry licences (if applicable), privacy policy, website terms, workplace compliance and insurance. |
Ongoing compliance and director duties
Company obligations
- Annual ASIC review and solvency resolution; pay the annual fee
- Notify ASIC of changes (directors, addresses, share issues/transfers) within required timeframes
- Maintain registers, minutes and financial records
- Tax and BAS lodgements; Single Touch Payroll, superannuation and payroll obligations
- Industry licences, WHS, fair trading and consumer law compliance
- Privacy and data handling where applicable
Director responsibilities
- Act with care and diligence, good faith and proper purpose
- Avoid improper use of position or information
- Prevent insolvent trading; understand cashflow and solvency
- Keep adequate financial records and oversee controls
- Engage early with the ATO to manage tax debts and DPN risk
Key documents for Australian company setup
Collecting the right records early makes advice more effective and helps avoid rework.
- Company constitution (or confirmation of replaceable rules)
- Director and secretary consents; Director ID confirmations
- Share structure, issue resolutions, share certificates and registers
- ASIC certificate of registration and company extract
- ABN/TFN/GST registrations and bank account confirmation
- Shareholder agreement (if more than one shareholder)
- Founder/employee IP assignment, contractor and supply terms
- Privacy policy, website terms and any relevant licences or permits
Company setup FAQ
Do I need a company to trade in Australia?
No. You can trade as a sole trader or partnership, but a company offers limited liability, clearer ownership and is often preferred for growth and investment.
What should I decide before registering?
Directors and shareholders, share classes and percentages, company name, registered office, governance (constitution vs replaceable rules), and whether you need a shareholder agreement.
Can I use replaceable rules instead of a constitution?
Yes, but a tailored constitution can address share classes, pre-emption, drag/tag and other points that matter once investors or employees hold equity.
Will I need GST registration?
You must register if your GST turnover meets the threshold. Some industries register earlier for input credits and invoicing expectations.
How do I keep costs predictable?
Ask for a fixed-fee bundle that includes incorporation, constitution, ABN/GST, initial registers and a short shareholder agreement workshop.
Need help with company setup in Australia?
Use the form if you want free guidance on structures, legal steps, documents or costs. If you choose, we can connect you with vetted business lawyers near you.