Build a Company

Why get a company?
A company limits the liability of shareholders for the company debts. A company enjoys a corporate tax rate of only 30%.

What''s more?
The company constitution you get from LawCentral also includes a Division 7A loan clause. This clause allows a company to lend money to a member with a deemed provision complying with section 109N(1)(a) of the Income Tax Assessment Act 1936.

• TRUSTEE OF A SELF MANAGED SUPER FUND
  QUESTION: Can this company be used as trustee of my self managed superannuation fund?
  
  ANSWER: Yes, you have the power to turn your company into a Special Purpose Company to use solely as trustee of your Superannuation Fund. You therefore get the much cheaper ASIC rates.



• DIVISION 7A AGREEMENTS
  QUESTION: Does the LawCentral constitution include a Division 7A Loan Agreement?
  
  ANSWER: Yes, it does, but every financial year you need to print off the Annual Div 7A Loan Agreement, sign it and include it with the Company returns.
   


• SHARE CLASSES AND RIGHTS
  QUESTION: Does the constitution contain the flexibility of different share classes?
  
  ANSWER: Yes, you get plenty of opportunities to issue and allot various classes of shares (e.g. pay dividend only, don''t vote, vote only, pay capital only etc...)

How do I get my company?
1. Build the company at LawCentral.
2. Print out the documents.
3. Sign the documents.
4. Just take one of the above documents (Form 201) to your local ASIC office.
5. Give ASIC $433 and they give you a Certificate of Incorporation on the spot.
6. That''s it.

At LawCentral you get all the documents you need:

• The Company’s Constitution,


• Completed Form 201,


• Consent to act as Director,


• Consent to act as Director and Secretary,


• Other consents,


• Minutes of First Meeting of Directors
  (resolutions relating to the Company bank account),


• Blank pages of minute book,


• Share Certificates,


• Registers, and


• Bank Account Kit.


• Annual Div 7A Loan Agreement.

Download the Build a Company Checklist

Download the Build a Company Sample

Lodging Party
• Who is the Lodging Party?
• What is 'Your file reference'?
• What do I get from LawCentral for my money?
• What is the advantage of having a Div 7A Loan clau
• Where do I lodge the documents?
• What are ALL the costs to set up a company?
• Does a lawyer or someone check what I am doing?
• How long can you hold an ASIC form 201?
• Company as trustee of a Self Managed Super Fund?
• What is the total cost to set up my company?
Jurisdiction
• In which State do I register my company?
• How do I choose which State to register?
• What are the CPA Australia rules?
Company Name
• What names are available?
• What words are banned?
• Can I reserve a company name?
• I will choose the company name after Incorporation
• I already own a similiar business name
• What is a Special Purpose Superannuation Trustee Company (PSTC)?
Business Name
• Already own a similar business name?
• What is a business name?
• What does 'highly similar' name mean?
• Transfer old business name into your new company
Location
• What is a Registered Office?
• What is the address of the registered office?
• Also operate from the Registered Office?
Place of Business
• My company does not actually operate anywhere
Occupier Details
• What do you mean by Occupier's Consent?
Place of Business
• Company also be the Registered Office?
• I want to keep the address of the company private
• I don't know where my company will operate
• Can I operate the company from my home?
• We are going to operate from many locations
Ultimate Holding Company
• What is an "Ultimate Holding Company"?
• The so called Holding company is just a humble Trustee of my family Trust
Directors
• Can anyone be a Director?
• Do I have to provide all these personal details?
• Do I really need to give a home address for the Director?
• Where was the Director born?
• Is the first director also the Company Secretary?
• Is the First Company Director also the Secretary?
• I only want one Director
• Can a Director be another company?
• Who controls the company-Director or Shareholders?
• Who can't be a Director?
Shares
• What does ‘Ordinary Shares’ mean?
• What is the value of your shares?
• Can I put in different classes of shares later?
• How much is 0.01?
Shareholders
• Who are the Shareholders?
• What is the total amount of shares taken?
• What does "Shares fully paid for" mean?
• Does the above person own the shares beneficially?
• What is an "Ultimate Holding Company"?
• Can I keep my involvement with the company secret?
• Who controls the company-Director or Shareholders?
• I hold the shares for my trust
• What is the total cost to set up my company?

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Lodging Party

• Who is the Lodging Party?

  The Lodging party is the person or company who physically posts or hands over the paperwork to the Australian Securities and Investments Commision ('ASIC'). (ASIC is the government agency that incorporates the company.)
  
  The Lodging Party is often your accountant, lawyer and adviser. Or, you may be doing it yourself, in which case, put in your own details.
  
  You can't use a Post Office Box or a DX address. You have to use a physical address.

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• What is 'Your file reference'?

  If your accountant, adviser or lawyer is preparing this Company for you then they may have their own file reference. This helps your professional adviser track their own files in their own office.
  
  It isn't a file reference from ASIC or anyone else. It is just the accountant's file reference that he uses to keep track of his own files.
  
  Obviously, if you are lodging the application yourself, you don't have a file reference. You leave this blank.
  
  If you are a lawyer, an accountant or advisor, you may have a file name and number for your particular client. You fill in the client's file reference number.
  E.g. rc:47106:3838

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• What do I get from LawCentral for my money?

  You get all the paper work to incorporate a Pty Ltd company.
  
  You get all the documents you need, such as the Constitution, Minutes and Application form. They are all completed.
  
  The Company Constitution you get from LawCentral also includes a Division 7A Loan Clause.
  
  You print off the documents. You sign them. You take (or post) the Form 201 to your local ASIC office. You pay the $433 to ASIC and get your Certificate of Incorporation on the spot.
  

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• What is the advantage of having a Div 7A Loan clau

  When your company lends money to a Member, the Australian Taxation Office treats the loan as dividends. However, if you put a clause in your Constitution that complies with the requirements of Section 109N in Divison 7A of the Income Tax Assessment Act 1936, the loan is a deemed Divison 7A Loan Agreement. It is not a dividend.
  
  Each financial year you need to print off the Annual Div 7A Loan Agreement, have it signed and include it in the Company returns. You can find this document in the "Useful Link(s)" section after you have purchased this document.

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• Where do I lodge the documents?

  1. Answer the questions on line (you are doing this now).
  2. Print out the paperwork.
  3. Sign the paperwork.
  4. Take (or post) the Form 201 to ASIC with a cheque for $433.
  5. ASIC gives (or posts) you the Certificate of Incorporation.
  6. You have your own company.
  
  With the forms and papers you sign we also give you the address of every ASIC office in Australia (We have also put in that list at the end of this hint).
  
  CAN I PERSONALLY LODGE THE FORM WITH ASIC?
  Yes, you can. You (or a friend or secretary) can hand deliver the papers to ASIC during normal business hours and have the company registered on the spot.
  
  CAN I JUST POST IN THE FORM AND THE $433 CHEQUE TO ASIC?
  Yes, that is also fine. If you don't need the company set up immediately then just post the form. However, it will take a couple of weeks before the Certificate of Incorporation is posted back to you. You post to:
  
  Australian Securities & Investments Commission
  PO Box 4000
  Gippsland Mail Centre
  VIC 3841
  
  
  
  The ASIC offices to incorporate your company on the spot are:
  
  Adelaide
  Level 7, 100 Pirie Street
  Adelaide SA 5000
  
  Brisbane
  Level 20, 240 Queen Street
  Brisbane Qld 4000
  
  Canberra
  Level 2, 2 Allsop Street
  Canberra ACT 2600
  
  Darwin
  Level 7 TIO Centre, 24 Mitchell Street
  Darwin NT 0800
  
  
  Hobart
  Level 2, 70 Collins Street
  Hobart Tas 7000
  
  
  Melbourne
  Level 24, 120 Collins Street
  Melbourne Vic 3000
  
  
  Perth
  Level 3, 66 St Georges Terrace
  Perth WA 6000
  
  Sydney
  Level 5, 100 Market Street
  Sydney NSW 2000
  
  

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• What are ALL the costs to set up a company?

  LawCentral provides all the documents you need to form your new Pty Ltd company:
  
  a. Constitution;
  b. Minutes, Consents; and
  c. All other documents you need to incorporate.
  
  To incorporate you:
  
  1. build and pay for your documents at LawCentral (this is what you are doing at the moment);
  
  2. you print out all the documents;
  
  3. you sign all the documents (we give you a checklist on what you need to to sign); and
  
  4. you write a cheque made payable to "ASIC" for $433. You then post or take the cheque to ASIC's office with the Form 201. (They have offices all over Australia and we give you a list of their addresses)
  
  5. ASIC gives you a "Certificate of Incorporation".
  
  Congratulations! You formed a new incorporated company. It is now ready to use.
  
  The cost therefore has been what LawCentral charges and the $433 fee that ASIC charges.

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• Does a lawyer or someone check what I am doing?

  No. There are no lawyers at LawCentral.com.au. It is only a website that lawyers put documents onto.
  
  However, many people, including lawyers use LawCentral.com.au. They read the hints. They answer the questions. They get to read the Summary. You are only asked at the end if you would like to buy the document.

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• How long can you hold an ASIC form 201?

  In Law Central, we left the date of the party lodging the document blank so that it is flexible. As far as ASIC is concerned, if you don't lodge your Form 201, there is no request for building (incorporating) a company. It is only when you decide to build a company and lodge the form.
  
  There is no limit in the Act (Corporations Act 2001) between the time you build the document and when you lodge it. The closer to the time you build the document the better. It is because you want to secure the name of the company you chose. You don't want to delay lodging as someone else might lodge a same or similar company name before you.

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• Company as trustee of a Self Managed Super Fund?

  QUESTION: Is this company suitable to use as the trustee of a Self Managed Superannuation Fund?
  
  ANSWER: Yes it is, but only if you click the appropriate box when asked 'Is this a Special Purpose Superannuation Trustee Company (PSTC)?' in the Company Name section. But then the company cannot be used for something else.
  If the company is not a special purpose company, then the company is suitable to be the beneficiary of a Family Trust. It is suitable to run a business from. It can wear many hats and do many things.
  
  Each year you pay ASIC (Australian Securities & Investment Commission) to keep your company registered. This costs a few $100s of dollars. If however, you only want to use your company as a trustee of a Self Managed Superannuation Fund ('SMSF') then you can get a discount of that yearly fee.
  
  We don't encourage you to do this. This is because you can't use your company for any other purpose. If you forget that you have restricted the Constitution of the Company to just be a Trustee of a SMSF and then use it for another purpose you can suffer both criminal and civil penalties.
  
  This can also backfire onto the lawyer, accountant and financial planner working with you because rarely does anyone ever check your Constitution of the company. Most just assume that the company can do the usual jobs.
  
  If however, you do want to reduce your company down to only do this one job and save a few dollars then, later, you can prepare up some minutes, have a meeting and change your Constitution accordingly.

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• What is the total cost to set up my company?

  To build a company you need to:
  
  1. Build the necessary documents, Constitution and ASIC Forms. We charge $99 to do this.
  
  2. You then take the Form 201 to ASIC and give them $433.
  
  ASIC gives you the Certificate of Incorporation.
  
  Congratulations, you are now the proud owner of your Pty Ltd company.
  
  (ASIC = Australian Securities & Investment Commission. It is controlled by the Federal Government. It registers companies in Australia.)

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Jurisdiction

• In which State do I register my company?

  Under the Corporations Law in Australia, you can only register your company in one Australian state or territory. The Australian Securities & Investments Commission (ASIC) regulates this.
  
  Irrespective of which state you choose you still get the same company.

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• How do I choose which State to register?

  If you are based in Adelaide, you register your office in South Australia.
  
  If you are based in Melbourne, and you want to incorporate an international company, you register your office in Melbourne.
  
  Usually, a company registers in the state or territory of the company's principal place of business (a place where you run your day to day business operations).

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• What are the CPA Australia rules?

  Are you an accountant?
  
  If you are not an accountant just select No.
  
  If you are an accountant you should probably select Yes.
  
  Accounting firms can now incorporate. However, if your new company is going to operate as an accounting house you need special clauses in the company constitution. (These are a requirement of CPA Australia).
  
  Even if there is a slim chance the company might operate as an accounting house in the future, just select Yes now. The special clauses only operate while the company is an accounting firm.
  
  
  

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Company Name

• What names are available?

  You can't have a name similiar to a business name or another company name.
  
  For example:
  You can have Footloose (Aust) Pty Ltd even though these names are already in use:
  
  Footloose Pty Ltd
  Footloose Nominees Pty Ltd
  Footloose Industries Pty Ltd
  Footloose Global Pty Ltd
  
  Try your luck at a name at: http://www.search.asic.gov.au/gns001.html
  
  Help on selecting a name for your company:
  • no deceptively similar names;
  • no undesirable or likely to be offensive names;
  • at least one letter different to an
  existing company or business name;
  • no words specifically mentioned in the Corporations Regulations, including names suggesting a connection with:
      o the Crown,
      o the Royal Family,
      o an ex-servicemen’s organization,
      o any Government, State, Municipality, Territory, Department or Local Authority, and
      o Sir Donald Bradman;
  OR
  • not containing a prohibited word. In
  certain circumstances such prohibited words
  can be made available through Ministerial
  Consent.
  
  You can just incorporate your company with no name. Hence you use the ACN number as the name. However it is expensive to get the regulator (ASIC) to add or change the name at a different date.
  
  Similarly, if you don't like the name that you originally selected, then it is expensive to get ASIC to change the name.
  

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• What words are banned?

  These special names and phrases can't be used in your company name:
  
  A
  ABORIGINAL CORPORATION ABORIGINAL COUNCIL
  ANZAC AUSTRALIAN MADE
  AUTHORITY
  
  B
  BANK BANKER
  BANKERS BANKING
  BLIND BOARD
  BUILDING SOCIETY BUREAU
  
  C
  CHAMBER OF COMMERCE CHAMBER OF MANUFACTURES
  CHARTERED COOPERATIVE SOCIETY
  COOPERATIVE COMMISSION
  COMMONWEALTH CONSUMER
  CONSUMERS COUNCIL
  CREDIT UNION
  COLLEGE OF ADVANCED EDUCATION
  
  D
  DEAF DEPARTMENT
  DISABLED DUCHESS
  DUCHESSES DUKE
  DUKES
  
  E
  EXECUTOR EXECUTORS
  
  F
  FEDERAL FRIENDLY SOCIETY
  FUTURES EXCHANGE FUTURES BROKER
  
  G
  GENEVA CROSS GUARANTEE
  GUARANTEED GUARANTOR
  G.S.T GST
  
  H
  HANDICAPPED
  
  I
  IMPAIRED INC
  INCAPACITATED INCORPORATED
  INSTITUTE OF ADVANCED EDUCATION
  
  K
  KING KINGS
  
  M
  MADE IN AUSTRALIA MUNICIPAL
  
  P
  PARAPLEGIC PRINCE
  PRINCESS PRINCESSES
  POLICE policing
  
  Q
  QUADRIPLEGIC QUEEN
  QUEENS
  
  R
  RED CRESCENT RED CROSS
  RED LION AND SUN ROYAL
  R.S.L RSL
  
  S
  SAVINGS SAVINGS BANK
  SHARE MARKET SHIRE
  SPASTIC STARR BOWKETT
  STOCK EXCHANGE STOCK MARKET STOCKBROKER
  
  T
  TORRES STRAIT ISLANDER CORPORATION
  TRUST TRUSTEE
  TRUSTEES
  
  U
  UNITED NATIONS UNIVERSITY
  
  If you do what to use any of these words then you have to get permission from the relevant Minister.

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• Can I reserve a company name?

  Most people don't worry about reserving a name. It costs money and time to 'reserve' a name. They just use a name that is available right now and form the company.
  
  However, you can reserve a name while you are thinking of whether you are going to set up company or not.
  
  Complete Form 410 ‘Application for reservation of a name’. You pay a prescribed fee (currently $43) and lodge the form with ASIC.
  
  If the application is approved, the name will be reserved for a period of 2 months and ASIC will give you a ‘name reservation number’.
  
  You can request to extend the reservation for another 2 months before the initial period expires. ASIC will not continue to extend a name reserved indefinitely.
  
  All you need to do is to complete another Form 410 and pay another lot of the prescribed fee. You do not need to take this option if you opt for speedy registration.

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• I will choose the company name after Incorporation

  So you don't want to give your company a name, at the moment. This option is rarely selected. You can search to see what names are available at http://www.search.asic.gov.au/gns001.html. This is a free search.
  
  If you want to give your company a name at a later date, then there are more government charges and work for you. However, it is your choice to go without a name.
  
  It is not compulsory to nominate a name of a proposed company. You can use the A.C.N. This number is allocated to a company upon registration.
  
  You simply tick: "I will choose the company name after Incorporation."
  
  WARNING
  You can just incorporate your company with no name. Hence you use the ACN number as the name. However it is expensive to get to add or change the name at a different date.
  
  Similarly, if you don't like the name that you originally selected, then it is expensive to get ASIC to change the name.
  

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• I already own a similiar business name

  Does someone have a business name (or company name) that is very similar or identical to the name you want for your company? Then you probably won't be able to use that name. You will have to come up with another name for your company. Sorry.
  
  However, the situation is different if you own the business name. If you own a business name that is exactly the same or similar to the name you want then you can give permission for that business name to be used as a company name.
  
  Let’s say that you have a business name (in any state) being “Fred Bloggs Glassblowers”. Now you want to have a company with the name “Fred Bloggs Glassblowers Pty Ltd. That is fine. You can give permission for that.
  
  ASIC may require you to surrender the business name when you take up the new company name. However, often you can talk them out of that demand.
  

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• What is a Special Purpose Superannuation Trustee Company (PSTC)?

  This is a company that acts solely as the trustee of a regulated superannuation fund within the meaning of s19 of the Superannuation Industry (Supervision) Act 1993 and whose constitution prohibits the distribution of its income or property among its members.
  
  If this is the ONLY thing your company does, then your company can adopt a Constitution that will save it $187 in government charges each year.
  A normal 'Pty Ltd' company has to pay ASIC an Annual Review fee of $230. The 'trustee only' is a special purpose company and has to pay only $43. A saving of $187 each year.
  If you click the Super Trustee (PSTC) box, the company will adopt a Constitution complying with the above requirements.

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Business Name

• Already own a similar business name?

  If you own a business name that is exactly the same or similar to the company name you want then you can give permission for that business name to be used as a company name.
  
  Let’s say that you have a business name (in any state) being “Fred Bloggs Glassblowers”. Now you want to have a company with the name “Fred Bloggs Glassblowers Pty Ltd”. That is fine. You can give permission for that.
  
  ASIC may require you to surrender the business name when you take up the new company name. However, often you can talk them out of that demand.

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• What is a business name?

  When a person (whether a human or company or a partnership) carries on a business in a name different to its own name then it must register a "business name". This is done with the appropriate State or Territory Offices of Fair Trading and Consumer Affairs or Department of Commerce (not ASIC).
  
  Say you want the business name John Smith Plumbers. You have to register the name "John Smith Plumbers". Sure your name is "John Smith", but your name does not have "Plumbers" in it. Therefore you have to register "John Smith Plumbers" as a "Business Name".
  
  WHAT IS THE DIFFERENCE BETWEEN A "BUSINESS NAME" AND A "COMPANY"?
  For example. Unlike the incorporation of a company, registration of a business name does not create a legal identity. This means that the company is not entitled to a special corporate tax rate or limited liability.
  
  A "Company" and "human being" are both entities in their own right.
  
  Business names are recorded on the ASIC index register. This allows companies seeking to propose a company name to check for identical or similar names previously registered.
  
  

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• What does 'highly similar' name mean?

  ASIC (Australian Securities & Investments Commission) keeps a combined list of registered Australian Company Names, registered Australian Business Names and reserved Australian Company Names. You will not be able to use any of the registered or reserved names if it is identical to the one you proposed.
  
  ‘Identicalness’ does not just refer to identical in the words used when two names are compared. It also includes the symbols used which are easily accessible on the keyboard. They are used to convey some meaning and are not mere word-separators. They are in common use in the commercial world.
  E.g. @ (at) such as @Insurance Solutions;
  # (hash);
  $ (dollar);
  % (percent);
  * (asterisk);
  = equals
  
  However, the following symbols are treated as “punctuations” under the new ASIC policy:
  _ underscore
  - hyphen
  / slash
  | pipe
  \ backslash
  
  E.g.
  Work/Go Employment Solutions Pty. Ltd, Work-Go Employment Solutions Pty. Ltd. and Work_Go Employment Solutions Pty. Ltd and Work Go Employment Solutions Pty. Ltd.
  
  These names are all regarded as one identical name and therefore the ASIC would not allow registering against each other.
  

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• Transfer old business name into your new company

  Question: At present I am a sole trader. I have a registered business name with an Australian Business Number (ABN). After creating my new company how do I transfer the business name so that it is owned by my new company?
  
  Answer: It is a simple matter to transfer a business name. Just get the form from your local office (E.g. Fair Trading office – NSW; Consumer Affairs – Vic).
  
  However, don’t forget:
  
  1. There may be Capital Gains Tax and state duty payable on the transfer
  2. You need to eventually hand back the ABN to the Australian Taxation Office if you are not longer trading. (Your company gets its own ABN)
  

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Location

• What is a Registered Office?

  This is the place which will be open during business days. A company’s registered office does not need to be in the same Australian state or territory as its principal place of business in Australia.
  
  A registered office is where certain official documents, communications or notices to the company may be sent or left. Notices includes circulars and advertisements.
  
  A company must have a registered office in Australia. It cannot use a post office box. The registered office address does not necessarily have to be in the same Australian state or territory in which the company takes out its registration.
  
  If your company does not occupy the premises of the proposed registered office, the occupier, for example, your lawyer or accountant must give consent in writing. This must be stated in the application form. You do not need to lodge the consent with ASIC. It must be kept with the company’s record. ASIC can ask any person who signed the Form 201 to produce the written consent.

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• What is the address of the registered office?

  The Corporations Act says that you can't use a Post Office Box as an address of a company's registered office. You use the address where the official documents, communications or notices to the company may be sent or left. E.g. ASIC sends you a requisition for further details regarding your application. This needs to be sent to you through your registered office address.
  
  If you use the address of a rural property where you might use the 'Road Mail Box number'(RMB), you might like to consider including the name of the property to make it easier for people to identify.
  E.g. "Mooran River Lodge"

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• Also operate from the Registered Office?

  Does your company operate from the Registered Office?
  
  Why wouldn't my company operate from the Registered Office?
  
  You can have your Registered Office at your accountant's or lawyer's office. Your company probably does not operate from their office. In which case answer ‘no’ to this question. Don't forget accountants and lawyers charge to allow you to use their office as your Registered Office. Get their permission first.
  
  If you answer 'no' then the next question will be where your company operates from.
  
  Alternatively, just put down where your company will conduct its business – this can even be your home. In this case you would answer 'yes' to the question.

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Place of Business

• My company does not actually operate anywhere

  That is fine. Your company doesn’t actually need to do anything. You may just be holding pending the start of a new business.
  
  Sadly, you must give an address. It can be your home address.

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Occupier Details

• What do you mean by Occupier's Consent?

  The occupier of the premises has consented in writing to the use of the specified address as the address of the registered office of the company and has not withdrawn that consent.

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Place of Business

• Company also be the Registered Office?

  Yes, the address from which your company operates from can also be the Registered Office.
  
  If you want the Registered Office to be your company's principal place of business then press the "back" button and change your Registered Office.

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• I want to keep the address of the company private

  Sorry that is not possible. By law you have to put in the address from which you will operate the company.

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• I don't know where my company will operate

  That is fine. However, you will need some address. It can even by your home address.

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• Can I operate the company from my home?

  Yes. Your Registered Office can even be your home.

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• We are going to operate from many locations

  Good luck with that. You will need to select one address for the records.

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Ultimate Holding Company

• What is an "Ultimate Holding Company"?

  You are in the process of creating your own new company. If the shares in this new company are being held by yet another company, then tick "Yes".

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• The so called Holding company is just a humble Trustee of my family Trust

  If the shareholder of your brand new company (subsidiary) is another company (parent) then it is the "Ultimate Holding Company".
  
  However, if the parent company is a trustee of a family trust then the beneficial owner is not the parent company. It is those lucky beneficiaries of your family trust.
  
  In this case, you would answer "no". You don't have an "Ultimate Holding Company" if it is merely a trustee of a family trust.

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Directors

• Can anyone be a Director?

  WHAT DO THE DIRECTORS DO?
  A director controls the company by managing the business and affairs of the company.
  
  The director and the company secretary ensure that the company complies with the Corporations Act 2001 and all other laws.
  
  A director that works full time in the company is called an "executive director". A director that does not work day to day in the company is called a "non-executive director". Whether you are a non-executive or executive director you still have a high standard of care in protecting the company, the shareholders and even the creditors.
  
  Being a director is a great burden. Few people would want to be a director of a company unless they controlled the company.
  
  That is why, these days, most people opt to have only one director. For example, if mum and dad started up a company only one of them would go as a director. That reduces the risk.
  
  CAN I JUST HAVE ONE DIRECTOR?
  A company needs only one director. You can have more. If you have a single director then that person must live in Australia. If you are the only director of the company, you can also be the sole company secretary.
  
  CAN A CHILD BE A DIRECTOR?
  A director must be an adult of at least 18 years of age. You must be a natural person (that is, not a company, a trust, a club, or a partnership).
  
  CAN THE SHAREHOLDERS SACK THE DIRECTORS?
  Yes, the majority of shareholders can sack the directors.
  

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• Do I have to provide all these personal details?

  It is meant to be a great honour to be a director. (It is really a great burden.)
  
  The world has to know who you are, your date of birth and where you were born. As a director you are in the limelight. You are scrutinized.
  
  You need to give your Family (Surname) name and your given names.
  
  You must give you FULL NAME and not initials, e.g. ‘Mary Jane’ and not ‘MJ’.

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• Do I really need to give a home address for the Director?

  The Director’s address must be the person’s usual residential address (unless ASIC has previously approved an alternate Australian address).
  
  A home address is required by ASIC under the Corporations Act 2001 section 205D.

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• Where was the Director born?

  You need to give the name of the town/city and the state/country of where you were born.
  e.g. 'Sydney', and 'New South Wales', or in case of a rural birthplace, use a property name via town or city – e.g. 'Kingston Station via Kimberley'.
  

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• Is the first director also the Company Secretary?

  Yes. That is correct.
  
  The first Director that you name is also the Company Secretary and Public Officer.
  
  The Company Secretary and Public Officer are responsible for various duties. They include the following:
  
  • notification of ASIC of changes to the location of the company’s registered office; or
  
  • changes in any details of the Company’s Secretary and Directors; and
  
  • lodgement of the company’s annual return with the ASIC.
  
  A proprietary company usually has only one Company Secretary. It is not compulsory to have a Company Secretary by law. There is no upper limit on the number of Company Secretaries.
  
  A Company Secretary may also be one of the company's directors, and in the case of a
  ‘One person company’ may even be the sole director and sole member/shareholder of the company.
  
  When answering this question, the Company Secretary must nominate an Australian address.

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• Is the First Company Director also the Secretary?

  The person who consents to take up both positions as the company's Director and Secretary will be the first on the Director’s list.
  
  It is not compulsory to have the first Company Director be appointed as the Company Secretary by law. If you are the only director of the company, you may also be the sole company secretary.
  
  

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• I only want one Director

  That is fine. Many people opt to only have a single director for their company.
  
  It is much safer from an asset protection point of view.

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• Can a Director be another company?

  Good idea. However, the law won't let you do that. You need a living human being as a Director.

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• Who controls the company-Director or Shareholders?

  It is very common for the director to own not one share in the company. This is because the director will often go bankrupt with the company. Being a director is a big risk. People that take big risks should not own assets. So yes, you can be a director and own not one share in that company. Or as a director you could own 100% of the shares in the company. It is your choice.
  
  Who then really controls the company? Let me make this very clear. The shareholders own and control the company. The directors are just there to operate the company. The directors are employees of the company. They have to act in the company's best interests. At any time the shareholders can call a meeting and sack the directors - for no reason. The shareholders own the company. The directors merely, at the whim of the shareholders, run the company.
  
  The next question is, as between the shareholders, who controls the company? The simple answer is if you have 51% of the shares of the company (or more) then you control it. This is all that generally needs to be said for these small Pty Ltd companies. Of course, if you are a big company (Limited company) then you may have 100s of shareholders that never vote. In which case you may only need less than 51% of the shares of company.

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• Who can't be a Director?

  WHO CAN'T BE A DIRECTOR?
  A director needs to be a fit person. It means that you have not been convicted of certain type of offences as set out in the Corporations Act s201B(2) and s206B(1).
  
  You can't be subject to any deed of arrangement with creditors. You are not currently an undischarged bankrupt (that is you are not currently bankrupt).

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Shares

• What does ‘Ordinary Shares’ mean?

  Shares are classified under class codes. Most of the members/shareholders of a company opt for ‘ordinary shares’. This means that they have no unusual rights attached to them.
  
  Ordinary share rights exclude any special preferential voting or dividend rights. They are rights for preference shares. The rights of ‘ordinary shares’ are set out in the Corporations Act 2001 and the development from case precedents over a few hundred years.
  
  If you want to set up the company with class of shares other than ordinary shares, you need to adopt a written constitution setting out special rights attaching to those shares.
  
  If you want to issue preference shares, you must either set out in the constitution or be approved by a special resolution for:
  
  a) repayment of capital;
  
  b) participation in surplus assets and profits;
  
  c) cumulative and non-cumulative dividends;
  
  d) voting; and
  
  e) priority of payment of capital and dividends in relation to other shares or other classes of shares.
  

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• What is the value of your shares?

  This is the value of each of your shares. You only need to write the amount in digits. The dollar sign is already written for you.
  
  As a member/shareholder of the company, you are liable to pay for the whole sum of money you agreed for the total amount of shares you bought.
  
  When working out the amount of shares and the amount payable, you need to take into consideration whether you can afford to, and genuinely intend to pay.
  
  Make sure you know how much it costs per share and work out the total amount. You will be legally obliged to pay this money to the company.
  

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• Can I put in different classes of shares later?

  QUESTION: I am in the process of building a company, but there is no area that I can find to issue different classes of shares. How can I do this?
  
  ANSWER: From time to time, after you form the company you can add in different classes of shares. There are an infinite number of types of different classes of shares. You can have a lot of fun here.
  
  For example, you may want some shareholders to have a fixed percentage return each year (e.g. 10%) and take a preference if the company is ever wound up. This is one of the many types of preference shares. You can have shares which provide no capital or voting rights - but have access to dividends. Or you can have shares with only voting rights. The list of ideas is endless. Sometimes these different classes of shares are called "A class shares" and the like.
  
  Anyway, after you form the company you are at liberty to issue any number of different types of shares and classes of shares as the tax laws and ASIC laws allow.

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• How much is 0.01?

  0.01 is one cent
  
  0.10 is 10 cents
  
  1.00 is $1.00
  
  1.25 is $1.25
  
  

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Shareholders

• Who are the Shareholders?

  A director runs the company. A shareholder owns the company.
  
  Shareholders are also known as "members". They are the persons or entities which collectively own the company.
  
  The company must have at least one member. You can't generally have more than 50 shareholders.
  
  Can a director be a shareholder as well?
  One person can be a sole director and secretary. That same person can own all of the shares.
  
  Can a shareholder be another company?
  Yes. Members do not need be a natural person. They can be a company, or any other form of body corporate (e.g. an incorporated club).
  
  Can a business name be a shareholder?
  Sorry, but no. A mere registered business name can not be a shareholder. However, the person or company trading under that registered business name could be a shareholder.
  
  A mere partnership name can not be a shareholder. However, individual partners in that partnership can be shareholders.
  
  A mere trust name is not specified as a member. For example the "John Smith Family Trust" can't be a shareholder. However, "John Kevin Smith as trustee of the John Smith Family Trust" is fine.

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• What is the total amount of shares taken?

  Please enter number of shares using digits not words.
  
  This number may be as little as '1' or as many shares as you like.
  

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• What does "Shares fully paid for" mean?

  'Fully paid initially' means fully paid immediately on, or immediately following, the incorporation of the company.

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• Does the above person own the shares beneficially?

  You answer ‘yes’ if you are the owner of the share(s). You simply hold the share(s) for your own benefit. You do not hold the share(s) 'on trust' for another Party.
  
  You can hold shares for another person.
  You answer 'no' if you hold the share(s) for the benefit of another 'Party' (person or entity). For example, if you hold the share(s) as trustee for a family trust, you are said to be:
  • the 'trustee'; or
  • the 'non-beneficial owner'; or
  • the 'mere registered holder'; or
  • the 'legal owner'.
  
  The person or entity is the 'beneficiary' or 'beneficial owner' or the 'real owner' or the 'equitable owner'.
  
  

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• What is an "Ultimate Holding Company"?

  You are in the process of creating your own new company. If the shares in this new company are being held by yet another company, then tick "Yes".

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• Can I keep my involvement with the company secret?

  There may be many reasons why you don't want people to know who owns the shares in the company. That is the right of any person. Yes, you can keep your affairs secret. You can do this legally. Appoint a "shareholder" who you know and trust. Complete their details on this page and for the question: "Does the above person beneficially own the shares" - just answer "no". No other records are kept. Please also get your "shareholder" to complete and sign the Declaration of Bare Trust:
  
  "DECLARATION OF BARE TRUST
  
  I, ............................ (trustee) declare that I am going to acquire some shares in ...................................... Pty Ltd.
  
  
  
  
  I, as trustee, further declare that I hold those shares in trust for .................................................. (beneficiary).
  
  
  
  I have also signed an undated Share Transfer Form transferring the shares from myself as trustee to the beneficiary. I have handed that undated Share Transfer Form and this Declaration of Bare Trust to the beneficiary.
  
  
  
  I, as trustee hold the shares as mere bare trustee. I will vote those shares as directed by the beneficiary. In respect of those shares I will do everything as instructed by the beneficiary. I will act in the beneficiaries best interests at all times.
  
  
  
  The beneficiary is aware that the beneficiary should only sign that Share Transfer Form when the beneficiary is ready to actually transfer those shares to the beneficiary.
  
  
  
  When I, as trustee, eventually get the share certificate I will hand that to the beneficiary as well.
  
  
  
  Once the beneficiary has the signed Share Transfer Form and share certificate then the beneficiary can, at any time, transfer the shares into the beneficiary's name. The beneficiary has been advised to keep a copy of this Declaration of Trust to show to the accountant so that the accountant can argue that there is no Capital Gains Tax on the "disposal" of the shares from the trustee to the beneficiary because there would be no change of beneficial interest.
  
  
  
  The trustee has also explained to the beneficiary that this Declaration of Trust must be signed and dated before the shares in the above company are issued and allotted to the trustee.
  
  
  
  .......................................... Signed by the trustee, dated ................
  
  
  
  
  
  .......................................... Signed by the beneficiary, to acknowledge having received a copy of this, dated ............
  
  

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• Who controls the company-Director or Shareholders?

  It is very common for the director to own not one share in the company. This is because the director will often go bankrupt with the company. Being a director is a big risk. People that take big risks should not own assets. So yes, you can be a director and own not one share in that company. Or as a director you could own 100% of the shares in the company. It is your choice.
  
  Who then really controls the company? Let me make this very clear. The shareholders own and control the company. The directors are just there to operate the company. The directors are employees of the company. They have to act in the company's best interests. At any time the shareholders can call a meeting and sack the directors - for no reason. The shareholders own the company. The directors merely, at the whim of the shareholders, run the company.
  
  The next question is, as between the shareholders, who controls the company? The simple answer is if you have 51% of the shares of the company (or more) then you control it. This is all that generally needs to be said for these small Pty Ltd companies. Of course, if you are a big company (Limited company) then you may have 100s of shareholders that never vote. In which case you may only need less than 51% of the shares of the company.

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• I hold the shares for my trust

  That is fine. Just answer "no" to the question "Does the above person own the shares beneficially?"
  
  It is as simple as that. ASIC requires no further information. It only wants "yes" or "no".

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• What is the total cost to set up my company?

  To build a company you need to:
  
  1. Build the necessary documents, Constitution and ASIC Forms. We charge $99 to do this.
  
  2. You then take the Form 201 to ASIC and give them $433.
  
  ASIC gives you the Certificate of Incorporation.
  
  Congratulations, you are now the proud owner of your Pty Ltd company.
  
  (ASIC = Australian Securities & Investment Commission. It is controlled by the Federal Government. It registers companies in Australia.)

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