Like many things in Australia, starting a company requires some administrative elements that need to be fulfilled, beginning with the actual registration of the company which is a requirement mandated by the Corporations Act 2001 (the Act). There are some types of companies that may be excluded from registration, such as incorporated associations or co-operatives which may instead be governed by specific State or Territory legislative instruments; however for the majority of companies who wish to do business in the country, registration is essential.
Some things that should be sorted out prior to registering a company
There are a few elementary things that need to be sorted out before a company is registered, and can include some of the following:
- the type of company that is to be registered;
- the internal rules to be used which can be a constitution, replaceable rules or a combination of both;
- the first member or members of the company;
- who will be the director or directors of the company, as well as the company secretary;
- if there is to be any share capital;
- the location of the registered office of the company;
- the name of the company.
How to register a company
The requirements and procedure for registering a company can be found in Part 2A.2 of the Act, alternatively, many of our readers may also be interested in the procedure for registration of a proprietary company limited by shares and the relevant provisions can found in Pt 1.5, para 3 of the Small Business Guide of the Act.
When registering a company, the process must conform to the s 117(2) provisions of the Act, and a standard form [Form 201] must also be lodged, as prescribed by Sch 2 of the Corporations Regulations (the Regulations). Companies that have a share capital will attract an applicable fee of $426 (June 2012) which is payable upon the lodgement of the form.
A company will come into being as a body corporate at the beginning of the day in which it is registered, and a certificate of registration with the name of the company will also be provided.
The certificate of registration signifies that:
- all the registration requirements have been complied with;
- the company is registered; and
- the date of registration.
Why do companies need internal rules?
Companies that conduct business in Australia need internal rules that govern the various relationships which exist between members and the officers.
Should a company use a constitution, replaceable rules or a combination of both as their internal rules?
The obvious question will be: What rules would be most appropriate to my company? Well, the answer will depend on the type of company that is being registered, and whether the company was registered before or after 1 July 1998 – but for the purposes of this article, we’ll just assume that everyone reading this will have started their company after the introduction of the Act.
Getting back to our question regarding what type of internal rules should govern a company: Well, the answer really depends on the individual circumstance; however, what we can tell you is that the following types of companies cannot generally rely on replaceable rules:
- no liability companies;
- proprietary companies that have a sole director and sole shareholder;
- companies limited by guarantee that wish to be registered without using the word ‘limited’ in their name; and
- public companies that are listed on the Australian Stock Exchange (ASX).
We should add that other types of companies can choose to adopt a constitution if they wish and is dependent on the particular circumstances of the individual company.
If you have any questions or concerns in regards to starting your own company, don’t hesitate in contacting a lawyer who will be able to help with any inquiry you should have.