Find out the key steps for forming a Limited Liability Company (LLC) in Australia. In Australia, the equivalent to the LLC is called a Proprietary Limited Company or Private Proprietary Company. Understanding the characteristics of this entity type and your obligations is crucial to full corporate compliance in Australia.
Australia is renowned for its consistently positive economic growth for over 26 years, and strong mining, agricultural, and services sectors. The country’s highly innovative nature and proximity to wealthy Asian markets make for a powerful regional hub to develop your business.
Understand the key steps to forming your LLC in Australia.
What are the characteristics of an LLC in Australia?
An LLC or Proprietary Limited Company in Australia has few requirements to get started, which is why it’s considered the most common type of entity in Australia. Like other LLC entity types, the owner is not personally liable for company debt.
Minimum requirements for an LLC in Australia include:
- Zero minimum share capital
- 1 shareholder
- 1 company director
- 1 resident director.
This company is one of the best options for foreigners looking to conduct commercial activities in Australia.
As an LLC in Australia, you’ll need to produce annual financial statements. However, you won’t need to register for GST unless your sales exceed AU$75,000 in the year.
How do I form an LLC in Australia?
In Australia, the relevant government authorities that administer company formation processes are the Australian Securities and Investments Commission (ASIC) and Department of Industry, Innovation and Science.
Typically, the first step to company formation in Australia is choosing your business type. If you’ve chosen to start a Proprietary Limited Company (the LLC) in Australia, the next steps are as follows:
1. Reserve your company and/or business name
Each company in Australia needs its own unique company name. It can’t be the same as another business. It’s a good idea to check that your chosen name doesn’t conflict with any registered or pending trademarks in Australia.
If you don’t choose a company name when forming your LLC in Australia, the Australian Company Number (ACN) generated during the company formation process will act as your company name.
The company name must display its legal status; as a Proprietary Limited Company, you must have ‘Proprietary’ or ‘Pty’.
A business name is slightly different. Business names don’t create new, separate entities. Your business name is your trading name.
2. Draft and sign bylaws for your LLC in Australia
You’ll then need to decide on the governance of your Proprietary Limited Company or LLC in Australia. There’s more than one way to do this; you can decide to
- operate your company under the replaceable rules listed under the Corporations Act
- create a unique constitution
- incorporate elements of the replaceable rules, and include your own.
A Proprietary Limited Company with a sole director, who is also the single shareholder, doesn’t need a formal internal governance system.
3. Appoint a Company Director and other statutory officeholders
First, you’ll need to partner with a legal representative residing in Australia in order to form your LLC. This role is known as the Company Director in Australia. Each proprietary company must have at least one director.
The Company Director is responsible for overseeing the affairs of the company. Foreign companies can choose to appoint a Nominee Director, who is external to the company but is authorized to make legal decisions on its behalf. The individuals in these roles are responsible for ensuring the company is fully compliant with all obligations under the Corporations Act.
You’ll want to find a private services provider experienced with all commercial aspects of Australian law, including company incorporation, hiring staff, the signing of complex legal contracts or even company liquidation.
4. Register your Proprietary Limited Company (LLC) in Australia
You can register your company online or on paper. Australia’s Business Registration Services provides an online portal to complete your application.
There are certain cases where a company can’t register online. It’s helpful to engage an external service provider on best steps for your company.
Once approved, your Proprietary Limited Company will receive its Australian Company Number, Australian Business Number, certificate of registration and a corporate key to securely update your company information.
5. Get your business and tax identification numbers
Next, you must register for the appropriate taxes for your LLC in Australia. All businesses need a tax file number (TFN) to do this. This is automatically generated when you receive your Australian Business Number (ABN).
The ABN is a unique 11-digit number that identifies your business or organisation to the government and community. This process can also be done online through the Business Registration Service website.
You may need to register for goods and services (GST), income, withholding and fringe benefits taxes depending on your circumstances.
6. Open a corporate bank account
Once your company has been registered, you can set up a corporate bank account. There are several highly reputable banks in Australia offering a number of corporate banking options.
Generally, you can choose to create corporate checking, savings and term deposit or fiduciary accounts. Each of these account types serve different purposes, and each can be valuable for companies.
The country’s Anti-Money Laundering and Counter-Terrorism Financing Act in 2006 set strict regulations for banks to undertake their due diligence with new applicants. For this reason, you can expect to provide a wide range of documentation confirming yours and your directors’ information, identification, and details of your newly-registered company.
Contact the experts to form your LLC in Australia
As a foreign company expanding to Australia, it’s beneficial to seek out an external provider who can act as your Nominee Director in the country. That way, you can get specialist support to form your LLC in Australia in full compliance with corporate regulations.
Get started in a strong, stable economy with minimum liability by forming a Proprietary Limited Company in Australia through Biz Latin Hub. Our team of local and expatriate professionals have the depth of knowledge and experience to enable foreign companies in Australia through providing a full range of market entry and back-office services. This includes market entry strategy, company formation, ongoing commercial representation, hiring, visa processing, and due diligence activities.
Get in touch with us here at Biz Latin Hub for personalized advice on how you can get started.
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