Last editedNov 20203 min read
Embarking on a brand new business venture can be an extremely exciting process. But before you start trading, you’ll need to make sure that your business is legit and you’re in compliance with the local laws and regulations. Want to know how to turn your start-up from a bright idea to a living, breathing business entity? Here’s our step by step guide for how to register a company in Australia.
1. Choose your business structure
Firstly, you’ll need to select a business structure. This determines a wide range of things, including the level of control you hold over the business, your personal liability for the business, the licenses your business requires, and the tax bracket of the business. While it’s important to choose a business structure that suits your company, the choice you make at the outset doesn’t have to be final. You can change your business structure later if your business expands or scales down. There are a couple of different business structures to choose from, including:
Sole trader – As a sole trader, you’ll be responsible for every aspect of the business. This is the simplest business structure, and it’s very easy to set up and operate. Although sole traders have fewer reporting requirements, it’s important to remember that they also have unlimited liability, so if the business fails, your personal assets may be at risk.
Company – Unlike partnerships or sole traders, companies are separate legal entities. It’s a more complex business structure to set up and involves higher costs, but you won’t be liable for any of the debts that the company incurs.
Partnership – A partnership is a business structure consisting of two or more people who share control of the business. There are three main types of partnerships: general partnerships, limited partnerships, and incorporated limited partnerships.
Once you’ve decided on a business structure, it’s time to move onto the legal aspects of how to register a business in Australia.
2. Apply for an Australian Business Number (ABN)
The Australian Business Number (ABN) is a unique, 11-digit number that is used to identify your business to the government, banks, and the wider community. It enables you to claim goods and services tax (GST), claim energy grants credits, avoid pay as you go (PAYG) tax, and get an Australian domain name. To register for an ABN, you’ll need to provide proof of identity, details of your business associates and activities, and choose a business structure.
3. Register your company name
Next up, it’s time to find out how to register a business name in Australia. Your business name is simply the name that your business trades under. It distinguishes you from your competitors and helps your business create an emotional connection with customers. Learning how to register a business name in Australia is a simple process. Here’s a guide detailing everything you need to do:
First, you need to check whether a business name is available.
Then, you should double-check whether you need to register the name. If you’re trading under your own name, you don’t need to register.
Finally, you need to officially register the name. You can do this online with the Australian Securities and Investments Commission (ASIC).
Remember, your business name is usually the first thing anyone knows about your company, so it pays to put some thought into it. Pick a name that’s short, memorable, and easy to pronounce.
4. Get a Tax File Number (TFN)
Finally, you’ll need to get a Tax File Number (TFN) to ensure that you’re registered for the correct taxes. If you’re operating as a sole trader, you can simply use your individual TFN. However, businesses that are operating as a company, trust, or partnership will need a separate TFN. Applying for a TFN is relatively easy, as you can apply online.
Next steps
Now that you know how to register a business in Australia, your business should be completely above board and ready to start taking orders. In the early stages of any start-up, it’s important that you have a healthy cash flow. Without a steady stream of income, it’s very easy for financial hardship to derail your business before it’s really had a chance to grow. By using GoCardless to collect automatic payments, you can help your business get paid as quickly as possible, ensuring a healthy cash flow.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.