We check your Pty Ltd company registration. This is before it proceeds to ASIC.
Incorporating a company with ASIC is important.
Our company and constitution comply as a:
We talk to ASIC on your behalf. This is to make sure your company is registered correctly. Our law firm provides a complete company register. It contains all minutes and our constitution. The documents are stored online for you to access at any time.
As you build your Australian company on our website, check if your preferred company name is available.
You cannot use the words:
You cannot use words that could mislead people about a company’s activities. This includes links to the Government, the Royal Family, or ex-service groups.
ASIC refuses offensive and illegal names.
Australian Business Number: ABN
Company: Co, Coy
Proprietary Limited: Pty Ltd
Companies are governed by:
* a constitution (recommended), or
* replaceable rules
Replaceable rules (from the Corporations Act 2001) provide a basic set of rules for your company. They are not good. Few accountants, lawyers or advisers recommend them.
Replaceable rules are less than the bare minimum. There are many additional powers that a company should have. These are only found in a constitution.
Replaceable rules change at the whim of the current government. While the changes may benefit ‘society’, they may not be in the best interests of shareholders. In contrast, shareholders can amend constitutions anytime.
* Adj Professor, Dr Brett Davies’ Doctorate was on business succession planning, our pre-emptive rights are cutting edge
* ‘tag along’ requirement forcing minority shareholders to also sell their shares together with majority shareholders
* accountant friendly, GAAP compliant valuation powers
* profit distributions, even when there is no ‘profit’ for ATO purposes
* over 30 different classes of shares
* allowing Directors and shareholders to use Skype and other online facilities
* built-in Division 7A Loan Deeds
Pty Ltd companies form the vast majority of companies registered in Australia. Over 99% of companies incorporated in Australia are Pty Ltd.
The 7 advantages of using Legal Consolidated:
A company pays tax at a fixed rate. (In contrast, a human being pays tax at different marginal tax rates. The more you earn the higher the tax rate.) Your company (flat) tax rate depends on whether the company is a base rate entity.
From 2021 there is a 5% difference.
For example, in 2018/19, a company’s base rate entity and use the Low Rate if its aggregated turnover is less than $50m and 80% or a less of its assessable income is base rate passive income. Passive income includes such things as dividends and rent.
The maximum rate that a company can use to frank dividends is its corporate tax rate for imputation purposes. It is worked out based on the company’s position in the prior year. It is either the current year Low Rate or the High Rate based on the prior year’s levels of aggregated turnover, base rate passive income and assessable income.
If the company was set up in the current year then the maximum franking rate is the Low Rate for the current year.
Q: When purchasing a new company on your website, does the constitution by default include a clause allowing for digital signatures of Directors? I know you don’t like digital signatures!!
A: You are correct, I do not like digital signatures. But the Constitution is fully updated to allow for all legislation of digital signatures and over Internet meetings, such as:
Yes. It is called a Corporate Power of Attorney. Legal Consolidated Constitutions allow for Company POAs.
Over 99% of Pty Ltd companies only have one director. This is for asset protection. But you can have more. There are distinctions in the types of directors. These are all ‘nicknames’ for different roles a director may hold. You can mix and match these powers as the shareholders see fit:
The above expressions are descriptive. They are not strict legal terms. Because you have a Legal Consolidated Constitution you can change and amend the powers of the directors.
A Pty Ltd company in Australia requires a company register. All Australian companies keep some form of written financial records that:
Section 9 Corporations Act defines ‘books’ to include:
All Australian Pty Ltd companies maintain ‘books’. The common expression is the ‘company secretary file’. The Corporations Act sets out how this is maintained. It also states who is provided access to the information in the company secretary file.
You suffer penalties if you fail to maintain the company’s books, destroy or falsify them. For example, false minutes carry a fine and two years in jail.
These financial records can be electronic. But they must be convertible into hard copy. You must be able to print them.
Even if the financial records are held by your accountant, you, as a company officeholder, are still responsible for providing copies to auditors or anyone entitled to inspect your records.
Section 1306 Corporations Act 2001 permits companies to prepare and store their ‘books’. This includes registers and minutes, in a ‘mechanical, electronic and other device’.
But, the data stored in the device must be able to be reproduced ‘at any time’ in a written form. You must be able to print it out.
Also, Pty Ltd companies take reasonable precautions to protect its records against damage and tampering.
A company is also obliged to keep written financial records that correctly record and explain the company’s activities, financial position and performance. See section 286 Corporations Act 2001.
These records are kept for seven years. Section 288 allows financial records to be kept electronically. But, again, this is so long as they can be converted into a hard copy on demand.
Electronic signatures are recognised in Australian law under the Electronic Transactions Act 1999 (Cth). States adopt similar rules.
But these provisions do not apply to the Corporations Act 2001. Therefore, minutes are signed in hard copy before electronic storage.
Q: I want to appoint a Governing Director. This is so they cannot be removed. They are on the Board until they die, become of unsound mind or resign.
The powers of the Governing Director are:
A: Also, a Governing director has:
After your company is incorporated think about a Shareholders Agreement. This is if you have more than just you and your spouse control the Pty Ltd company. Shareholders agreements are in addition to the constitution. It between the members. It governs share ownership and transfers, dividend policies and management roles. They override the constitution.
Build a Shareholders Agreement. And in the Minutes have the shareholders unanimously agree to the powers of the Governing director.
For more legal advice on incorporating a company telephone us.
Adj Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, Dip Ed, BArts(Hons), LLM, MBA, SJD
Legal Consolidated Barristers and Solicitors
National Australian law firm
National Australia law firm
Mobile: 0477 796 959
National: 1800 141 612
Email: [email protected]