Registering a company is more than choosing a name and completing an online form. A company is a separate legal entity with its own records, tax obligations and ongoing administration. It can suit some businesses, but it is not automatically the best or cheapest structure for every owner. Compare the likely costs, responsibilities, risk profile and plans for growth before you register.
Is a company the right structure?
Sole traders, partnerships, companies and trusts are different legal and tax structures. A company can help separate the business from its shareholders, but limited liability is not absolute. Directors have legal duties, personal guarantees can create personal exposure, and a director may face consequences for failing to meet obligations such as insolvent trading rules. A company also has more administration than many small sole-trader businesses.
Tax should be part of the decision, not the only reason for it. Company tax rates have eligibility rules, and company profits belong to the company until they are paid or distributed in an appropriate way. Money taken by an owner may need to be treated as salary, director fees, dividends or another properly documented transaction. Private use of company funds and loans to shareholders can have tax consequences. Ask an accountant to compare the whole picture, including how you will access profits and what happens if the business changes or closes.
Prepare before you register
Decide on the type of company and its proposed name. Check ASIC's company-name rules and whether you also need to register a business name; registering a company and registering a business name are separate processes. Choose the state or territory of registration and arrange the registered office and principal place of business addresses. Make sure you have permission to use an address where required.
Plan the ownership and governance. Identify each shareholder, the number and class of shares, and how much is paid for them. Confirm that proposed shareholders agree in writing to their shareholdings. Decide who will be director and, if applicable, secretary. ASIC requires directors to apply for a director identification number before the company is registered, and the company must obtain the required written consents from its officeholders. Consider whether the company's internal rules will use the replaceable rules in the Corporations Act, a constitution, or a combination.
Register and set up the business
You can apply through the Australian Government's Business Registration Service, which submits the company registration to ASIC. If approved, the company is entered on the companies register and receives an Australian Company Number (ACN). Review the details carefully and keep the registration documents with the company's records. ASIC's fee depends on the type of company and can change, so check the current fee before applying.
After registration, work out which tax and business registrations are needed. These may include an Australian Business Number (ABN), a tax file number for the company, GST registration, PAYG withholding if you employ staff, and industry-specific licences. Registration requirements depend on what the business does and its turnover. Do not assume that company registration automatically completes every tax, employment or state-based registration.
Open a bank account in the company's name and keep company and personal transactions separate. Set up bookkeeping from the first transaction. Record sales, expenses, payroll, shareholder contributions, director loans and decisions about dividends accurately. If the company hires employees, it may have obligations for PAYG withholding, payroll reporting, super guarantee, workers compensation and other employment requirements.
Understand the ongoing obligations
Directors must act in the company's interests and meet their legal duties. The company must maintain appropriate financial and company records, keep its details up to date with ASIC, respond to its annual review, and pay applicable review fees. Tell ASIC about reportable changes within the required time. A proprietary company may also need to prepare and lodge financial reports in some circumstances.
The company has its own annual tax return and may have ongoing BAS, GST, payroll and super reporting obligations. The tax rate depends on the company's circumstances: for 2025–26 the ATO lists a 25% rate for base rate entities and 30% otherwise. Eligibility is based on defined tests, so do not assume a company qualifies for the lower rate merely because it is small. Keep evidence for deductions and ensure company and personal transactions are not mixed.
A practical setup checklist
• Compare the company with other structures and confirm the decision with an adviser. • Agree on ownership, share classes, officeholders and company rules. • Arrange director IDs, consents, addresses and the current ASIC registration fee. • Register with ASIC and obtain the relevant tax and business registrations. • Set up a separate bank account, bookkeeping process and secure record storage. • Calendar ASIC annual reviews, tax lodgements, BAS dates, payroll and super payments. • Review the arrangement if ownership, staff, activities or financial risk changes.
This is a general guide, not legal or tax advice. ASIC, the ATO and other regulators update requirements and fees. Check their current guidance and get advice tailored to your circumstances before registering or making structural changes.