Company incorporation

A company has the legal capacity and powers of an individual as well as the powers of a Owners Corporation, including the power to:

• Issue and cancel shares in the company (except in the case of a company limited by guarantee).
• Issue debentures (including debentures that cannot be redeemed, are contingently redeemable or are redeemable only after a long period).
• Grant options over unissued shares in the company.
• Distribute any of the company's property among the members, in kind or otherwise;
• Give security by charging uncalled capital.
• Grant a floating charge over the company's property.
• Arrange for the company to be registered or recognised as a Owners Corporation in other jurisdictions; and
• Do anything that it is authorised to do by any other law (including a law of a foreign country).

Step 1: Decide on your business structure

1. When a company is registered under the Corporations Act 2001 ('Act') it is automatically registered as an Australian company. This means that it can conduct business throughout Australia without needing to register in individual State and Territory jurisdictions.

2. Businesses that are not companies (e.g. sole traders and partnerships) are required to register their business name with the appropriate State/Territory. However, this is not necessary if the business is conducted under the name of the person or persons involved; that is, first name and surname, or initials and surname.

3. There are different types of companies

• Company limited by shares
• Company limited by guarantee
• Company limited by shares and guarantee
• Unlimited companies

Step 2: Choose a company name

1. Company name must indicate its legal status

(a) A company name must indicate the company's legal status. A proprietary company must include the word 'Proprietary' or the abbreviation 'Pty' in its name.

(b) A company must also indicate the liability of its members in its name;

• If the liability is limited the company name must end with the word 'Limited' or the abbreviation 'Ltd'
• If there is no liability the company must end its name with the words 'No Liability' or the abbreviation 'N.L.'

(c) However liability does not have to be shown if the company has been granted an exemption under Australian law. This exemption is only granted for companies with non-commercial objectives, such as a charity or benevolent organisation.

2. What names can and can't be chosen

• You can only choose a company name that is not already registered to a company or business. There is also a list of words that you cannot use without special approval.
• It is important to ascertain whether the name you have chosen is available for registration.
• Certain words and phrases cannot be used in company names without the approval of a specified Minister or Government Agency, for example words such as 'building society', 'trust', 'university', 'chamber of commerce' and 'chartered' as well as words suggesting a misleading connection with Government, the 'Royal Family' or an ex-servicemen's organisation. These restrictions make sure that a company's name does not mislead people about its activities.

(d) Names that are offensive or suggestive of illegal activity are also unable to be registered.

(e) Another important consideration is whether your proposed name is similar or identical to any registered or pending trademarks.

3. Using the ACN as a name

• It is not necessary to give a company a name. If you prefer, the name of the company on registration can be its Australian Company Number (ACN), a company attains upon registration.

Step 3: Obtain consents - member(s), director(s) and secretary(secretaries)

1. Before applying to register a company you must get the written approval from people who agree to fill the following roles:

• Director(s) (a director must be a person over the age of 18 years).
• Secretary (a secretary must be a person over the age of 18 years).
• Member(s) (every company must have at least one member).

2. A proprietary company must have at least one director, but need not have a secretary. The director and secretary (if any), must ordinarily reside in Australia.

3. A public company must have at least three directors and at least one secretary. At least two of the directors and one secretary must ordinarily reside in Australia.

4. For companies limited by guarantee, members are liable as contributories on a winding up of the company. Each member must agree in writing to the amount of 'guarantee' they will pay.

5. These declarations of consent or agreement must not be lodged when applying to register a company. The person applying for registration must have the relevant consents and agreements when the application is lodged and must give them to the company after the company becomes registered. The written consents must be kept with the company's records and the details will need to be recorded in the register of members.

Step 4: Complete and lodge the application

1. Once you have completed Steps 1-3 you can then complete and lodge the application for company registration.

2. There are legal responsibilities associated with incorporating a company which you will need to be aware of.

3. To ensure that you are complying with all the relevant laws and regulation in relation to your company we suggest you obtain legal advice prior to lodging your application.