So you’ve had a great idea that you think, nay know is going to change the industry. You realise this is more than just a hobby and truly believe that your creation is going to be disruptive in its field. It’s time to put this plan into motion! But where do you start?
Starting your own business requires determination, motivation and aptitude. You’ll learn quickly that time and money are of the essence. To help you work as efficiently as possible during the ‘start-up’ phase, I’ve put the following list together that outlines the steps you need to take when registering a business.
Choose a business structure
When you’re ready to start your business, there are several registrations that need to be complete. These registrations will depend on your chosen business structure. In Australia, there are four main business structures that are commonly used:
- Sole trader: A sole trader is a person who trades as the individual legally responsible for all aspects of the business. It is the most common form of business organisation in Australia and is easy to manage and free to register.
- Company: A company is a legal entity in its own right and operates separately from shareholders. Companies have specific responsibilities and obligations as outlined by ASIC (Australian Securities and Investments Commission).
- Partnership: A partnership is an association that involves a number of people (maximum of 20 people) who run a business together. All partners involved in a partnership are personally liable for all the financial obligations.
- Trust: A trust is a structure where a trustee carries out the business on behalf of a trust’s members. A trust is not a separate legal entity.
2. Choose a name
Often overlooked as an integral step in the starting-of-a-business process is the naming of a business. The right name will help distinguish your business from the crowded sea of bland competitors.
However, there are a few things you need to consider when choosing the right name for your business. You can only use a name that isn’t identical to an existing company or business name. You can use the ASIC name availability search to check that your business name is available.
3. Know how your company will be governed
Before completing registration, you need to decide how your company will function. There are three ways in which your company can be governed:
- Replaceable Rules: Are in the Corporations Act and are a basic set of rules for managing a company.
- Constitution: If a company isn’t governed by replaceable rules, they can have a written constitution.
- A combination of the two.
4. Register your company
There are two ways in which you can register your company:
- Private Sector Provider: There are several PSP’s who use software with direct access to ASIC’s systems. The benefit that comes with using a PSP is that most providers usually offer additional services, such as data visualisation so that you can see company structure’s in one simple diagram.
- Direct with ASIC: You can also lodge your company registration directly with ASIC by completing the FORM 201 and posting it to them.
What happens next?
Once you’ve registered your company, you need to ensure that you (or your appointed Auditor) maintain ASIC compliance. This includes keeping company details up to date, displaying the company name wherever business is conducted and ensuring that the company’s ABN is displayed on all documents that are published.