Incorporating a new company
In Australia, the process for starting (or “incorporating”) a new company has become a fairly straight-forward.
It is the sort of thing that most people can do themselves without legal assistance if they are keen to do things “on the cheap”. However, there does still remain a number of areas where it would be highly prudent to seek advice from a lawyer.
Note that this is not the same as simply registering a business name, which still needs some kind of a business structure (such as a company) to own it.
The key advantage of incorporating a company, of course, is that it is treated by the law as a separate legal entity. In other words, the company’s decisions and actions will be treated as being separate to your own personal decisions and actions – even if you are the only person controlling the company. This, therefore, considerably limits the scope of the legal liability that you can be exposed to personally.
The process for incorporating a new company basically involves the following:
- Business structure. Decide whether a company is in fact appropriate for you as opposed to other available business structures. [link]
- Company name. Choose an appropriate company name – that is, one that is not already in existence and which does not contain words that are prohibited by law (eg. “bank” or “government”).
- Governance. Decide how the company will be internally governed – that is, by the “replaceable rules” under the Corporations Act 2001 (Cth), by its own Constitution, or a combination of the two.
- Share structure. Decide how many shares will be issued, the classes of shares to be issued, and to which shareholders they will be issued.
- Consent. Obtain written consent from anyone who will be appointed a director, secretary or shareholder (known as a “member”).
- Registration. Complete ASIC Form 201 Application for registration as an Australian company, and either post it to ASIC, PO Box 4000, Gippsland Mail Centre, Vic 3841 or drop it off at your nearest ASIC office. There will be a registration fee of around $463.
- Record-keeping. Maintain proper records of the company’s governance documentation, certificate of incorporation, consents, shareholder register and other documentation.
Subsequently, ASIC will issue you with a “corporate key”, a unique 8-digit number which will act as your PIN to directly access and amend the company’s records online via ASIC’s database. This corporate key will also allow you to lodge documents online, instead of having to post them to ASIC.
You can start a company within 24 hours
While the process of incorporation is administratively fairly easy – you can start a company within 24 hours – the areas where it would be highly prudent for you to obtain legal advice are:
- Whether the company should be internally governed by the replaceable rules or a Constitution, or a combination of the two (this impacts upon the legal obligations of stakeholders as between themselves);
- The rights and obligations of company directors and officers (note they can become personally liable in certain circumstances if things are not done correctly as required by law);
- The rights and obligations of shareholders (you should have a Shareholders Agreement set up as neither the replaceable rules nor the Constitution will generally be sufficient); and
- The rights and obligations of the company, including in relation to its use of the company name, business name, ACN (or ABN) as well as keeping its ASIC records up-to-date.
Winthrop Mason Lawyers can assist you by:
- Advising on an appropriate business structure for yourself as the new owner;
- Considering the appropriateness of replaceable rules and/or Constitution for your business;
- Preparing your company’s Constitution and Shareholders Agreement;
- Drafting your company’s Minutes of Meeting, Shareholder Register, Share Certificates and other governance documentation;
- Advising on the rights and obligations of the company and internal stakeholders (directors, officers, managers, employees and shareholders);
- Incorporating your company with ASIC.
We are happy to perform this work for an agreed fixed fee.