Business in Australia

⇒ Proprietary Limited Companies
A proprietary limited company is similar to a private limited company or an LLC. This entity is the most adopted business structure by foreign investors wanting to establish their businesses in Australia. For the incorporation of this company, at least one resident director is required. The maximum number of shareholders in a proprietary company cannot exceed 50. These companies can be 100% foreign-owned entities and set up with an initial capital of $1. These companies must register for the Goods and Services Tax if their annual turnover crosses the mark of AUD 75,000. These companies are required to add ‘pty. Ltd’ with their company name.

⇒ Partnerships
A partnership in Australia is usually set up by general partners who are either liable for their partner’s activities or only up to their contribution to the partnership. These structures are traditionally adopted by accountancy and law firms. For incorporation of a partnership in Australia, the partnership must have at least one resident partner. Income and losses are shared among the partners, and the partners’ annual tax returns are filed individually. However, if their annual revenue exceeds the mark of $75,000, then GST registration becomes mandatory.

⇒ Branch Office
A foreign parent company usually forms a branch office. The branch office in Australia is a mere extension of the parent company to carry out operations in Australia. The branch office in Australia can carry out profit-making operations. A foreign company would have to register the branch office with the Australian Securities and Investments Commission (ASIC), and the company will be assigned an Australian Registered Body Number (ARBN). This is mandatory as the Australian branch is carrying out business. The Corporations Act 2001 makes it compulsory for a foreign parent company is required to appoint a representative for the branch office. This is mandatory to ensure that the branch office follows compliance. In order to set up a branch office in Australia, a registered office must be present having a local address. The Branch Offices are also required to submit annual financial reports to ASIC.

⇒ Representative Office
A representative office in Australia can be used for research and market research purposes but cannot conduct commercial activities or business in Australia. It allows the company to conduct limited and non-commercial activities, making it an ideal choice for companies who want to increase their global presence worldwide or to conduct market and R&D before entering the Australian market. It is cost-effective and simple to set up a representative office in Australia.

⇒ Public Companies
Public companies are those entities that have been permitted by law to raise money from the general public by offering their shares for sale, generally by listing them on the stock exchanges. These companies have to attach ‘Ltd.’ with their names. For their registration, they need to have a minimum of one member, at least 3 directors, and one secretary, and at least two of those directors are required to be residents of Australia. Unlike proprietary companies, public companies are required to appoint an auditor.

⇒ Trust
Trust is another kind of business structure adopted by small family-owned businesses in Australia or larger businesses with more than one family involved tend to use the unit or fixed trusts. Trusts in Australia are not considered separate legal entities and do not pay taxes on their own. The income generated by the trust is distributed to its beneficiaries, and the beneficiaries then pay taxes on their income. Trusts are established by a deed and not via registration with the ASIC. The trusts are required to carry on business and have to obtain the Australian Business Number. Every trust should have to appoint a trustee and a public officer who is resident in Australia.