Proprietary Limited Company (a ‘subsidiary’)
A proprietary limited company, often abbreviated as Pty Ltd, is the most common company structure in Australia. Unlike Australian public companies, a Pty Ltd company is unable to sell shares to the public. Upon registration, the company is issued with an ACN (Australian Company Number).
Registered Foreign Company (a ‘branch’)
A foreign company is one that is incorporated outside Australia. A foreign company can register with ASIC, allowing it to carry on business in Australia. Upon registration, the company is issued with an ARBN (Australian Registered Body Number). Registering a foreign company does not create a separate legal entity. Other types of companies include public companies and companies limited by guarantee.
How long does it take to incorporate/register a company?
Once the relevant data has been obtained, an Australian company can be formed almost immediately. The registration of a foreign company is generally lengthier, depending on the accessibility of the company’s information for the Australian authorities.
How many directors/secretaries does a company require?
A proprietary limited company must have at least one Director who ordinarily resides in Australia. A proprietary limited company is not required to appoint a Company Secretary. Australian legislation does not specify academic, business or other qualifications to be appointed as a Director or Company Secretary of an Australian company. Appointees, however, must be must be 18 years of age or older.
How many shareholders does a company require?
A proprietary limited company must have at least one shareholder and no more than 50 non-employee shareholders. Shareholders can be either individuals or other companies. The number of shares which can be issued by this type of company is unlimited.
What addressees does a company require?
Proprietary Limited Company
A company must have a registered office and principal place of business address in Australia. A post office box cannot be the registered office or principal place of business address. The addresses can be different locations.
Registered Foreign Company
Australian law requires a registered foreign company to have a registered office in Australia and a local agent who acts as a contact for ASIC (see definition below).
What are the corporate regulators?
The primary authority that regulates companies in Australia is the Australian Securities and Investments Commission (ASIC). Chiefly, ASIC administers the Corporations Act 2001. Other important agencies include the Australian Taxation Office (ATO), the Australian Prudential Regulation Authority (APRA), and the Australia Securities Exchange Limited (ASX).
What are the standard ongoing obligations of a company?
Proprietary Limited Company
Australian companies are required to maintain information with ASIC. This requires the lodgement of forms to reflect changes in company details, officeholders, shares and shareholders, and addresses. Failure to do so can result in fines or further action by ASIC. Most of these changes require internal resolutions as specified by the Corporations Act 2001.
Each year ASIC produces a Company Statement for review. This requires a solvency declaration by the directors, and the payment of a fee to ASIC. An Australian company which is controlled by a foreign company is generally required to prepare and lodge audited financial statements with ASIC. However, relief from this reporting requirement is available when the company meets certain criteria.
Registered Foreign Company
Registered foreign companies are required to lodge a copy of the company’s latest financial statements. The financial statements must be for the company as a whole, not just the Australian operations. Registered foreign companies are also required pay an annual review fee and lodge forms to reflect changes in details of the company, its officeholders, shares and shareholders, and addresses.
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