In order to get the AEReS project underway I wanted to set up this blog, and for that I wanted to register my own .com.au domain name. I did a search online for a decently priced registry service, but then in the process of signing up there was a point where I had to enter my Australian Business Number (ABN) or Australian Company Number (ACN) number. I had heard that the .com.au domain was reserved for businesses but I didn’t realise that it was actively done by checking your registration in order to grant you a .com.au domain.

I was planning on starting my first company later on in the year, not because I had a clear idea where any income was coming from yet, but just to start learning how to use the corporate structure and to run a company. I am a firm believer in learning by doing, so I figured I would start a company, get the hang of how to run it, then worry about profitability later. Since I needed an ACN number to register the .com.au domain name I figured what the hell and registered my company on the 13^th of March.

My company is called Allbutt Holdings Pty Ltd and will be the company I use to own and operate all my other companies that I have planned. Registering a company is a surprisingly easy and uncomplicated process to go through. Even though you are creating an independent legal entity when you do so, registering a company is easier than getting a visa to visit the US (as I found out on a recent holiday there, and not that much more expensive I might add)!

The government agency responsible for registering companies in Australia is the Australian Securities and Investments Commission (ASIC). If you go to that page there are a series of tabs to navigate around the site. The second one says “For companies”. If you mouse-over this one there is a drop down list of various pages with information related to starting up a company. There is lots of very good and detailed information here about running a company. Of particular note is all the information on, and references for, your legal responsibilities for running a company such as what records you have to keep and what submissions you have to make to ASIC.

Once you have read through that and fully understand what it means to register a company the most relevant page for the actual registration is the one entitled “Starting“. This is what I will be covering in this post. According to this web page there are 7 steps to registering a company. They are:

Step 1: Decide on your business structure

Step 2: Choose a company name

Step 3: Determine if you will operate under replaceable rules or a constitution or a combination of both

Step 4: Obtain consents - member(s), director(s) and secretary (secretaries)

Step 5: Complete and lodge the application form

Step 6 (optional): Get a commemorative record of registration

Step 7: Get to know your legal obligations

Step 1 just describes the difference between the corporate structure, ie owning a company, and the business structure. They are different entities legally so it is important to pick which one suits your needs.

Step 2 is straightforward though interestingly there is a list of words that are restricted when deciding on a name for your company. Step 3 is harder to understand. All companies operate under a set of rules which lay out what a company and its office bearers can and can’t do. There are a set of standard company rules which comply with the Corporations Act (2001), which are called the Replaceable Rules. They are called the Replaceable Rules since you can choose to operate your company under these rules or you may choose to replace them with other rules, still in keeping with the Corporations Act. The replaceable rules are listed at this page. If you are just starting out it is easiest to simply use the replaceable rules.

Step 4 is where you take the form for registering your company (the 201 form) around to your various office bearers to get them to sign it. If you are starting a private company, ie one not listed on the stock exchange where all the public companies are listed you only need one director. Having a secretary is optional for a proprietary (private) company.

Step 5 is where you complete the application form. You can then either post it into the ASIC or take it into one of their registered offices. Taking the form in your self is by far the fastest and easiest way. The ASIC web site doesn’t say but the five methods of payment listed on the page entitled Fees for lodging documents and how to pay them doesn’t apply to the 201 form fees. This fee must be paid upon submission or the form won’t be processed. You have to show identification if you are using the personal cheque so a bank cheque or a money order from the post office are probably your best bet if you are sending in your application. If you take your application in in person to an ASIC lodgement centre you can also pay in cash. You can’t use a credit card though apparently that is a facility that is coming soon. Keep an eye on that how to pay page to see when that becomes available. As for how much you have to pay to lodge your 201 form this is more difficult to find. There is a web page that you may come across which lists the various fees for various forms. The fee listed for the 201 form is on pg 2 and is listed simply as:

Application for registration as an Australian company

Part 2A.1 company (s112)

• having a share capital ($400)
• not having a share capital ($330)

All private companies are considered as having a share capital, ie a person or group of people own that company entirely, thus own all shares in that company. Therefore if you are registering a proprietary (private) company you will need to pay $400 to register it. If you were registering a public company you would pay $330 to lodge the 201 form. The fee is a little clearer on pg 12 of the 201 form its self which lists the two prices as:

• Public or proprietary company having a share capital $400
• Public company limited by guarantee $330

Step 6: There are very cool commemorative certificates of company registration you can order once you have registered your company. The framed version is a little pricey ($119.95 at the time of writing) but looks nice on the wall.

Step 7: Good information telling you about the legal responsibilities you have now that you have followed steps 1-5.

I found some points a bit unclear on the 201 for when I was filling it in so this is what I found out. At question 2 Details of the Company, you just need to tick Pty Ltd if you just want the initials listed with your company name, or you can tick the full words if you want. You don’t need both. There is no need to worry about the other boxes if you are registering a private company.

When you get to the section of Question 2 asking about the Type and Class of company (on pg 2), you tick “Proprietary company” and “Limited by shares”. I am not really sure what the “Unlimited by share capital” box means. Perhaps someone who knows the answer to this can leave a comment below.

You need to have a registered office, so fill this bit in. The registered office can be different from the place that you actually carry out the business of the company. The questions ask about this.

Question 3 you fill in only if the company you are registering will be owned by another company.

Question 4 is where you appoint the office holders of the company. As I mentioned above. You only need a single director if you are a proprietary company. You can however have more than this and can appoint a secretary if you want. At least one director and secretary (if appointed) must reside in Australia. There are lots of spaces for appointing directors and/or a secretary. Just leave the ones you don’t need blank.

Question 5 is about the share structure of your company. You can split your company into however many shares you want. In order to own that company you must then buy those shares. Question 5 is where you nominate how many shares your company has been split into. There is a big table of share classes which is just a way of differentiating between different types of shares if you need to. You don’t have to use different share types if you don’t want to. Different share types can be used if you want to give the holders of different share types different rights. To make it easier you can just make all shares ordinary shares (ORD). Having selected the share class, you then fill in the table saying how many of each share class your company has been divided into and how much these share cost. I split my company into 1000 chares worth $0.10 each, so I had to pay the company $100. Remember a company is NOT yours just because you registered it. A company is an independent legal entity. By registering it you have caused it to come into being, but to own it you must buy its shares.

Owners of a company are referred to as its “members”. You fill in the details of the members of your company in Question 6. The directors which you nominated in Question 4 are simply the people who will run your company, not the owners. They can be the same person, but the details of this person or people need to be entered in both questions including address details. You also enter how many shares of each type each member took up and how much they paid for them in a table at Question 6. There are multiple places to enter members in this question. Feel free to leave the unused ones blank.

Once you have then signed and lodged the form you will then be the proud owner of your very own company.