Proprietary Limited Company
A Proprietary Limited (Pty Ltd) Company is the most common form of company in Australia and is most usually formed when starting a trading business. It can also be established to act as a corporate trustee of a trust.
SMSF Trustee Company Registration
An SMSF Trustee Company is one that has powers limited to acting as a trustee of a superannuation fund. This can be the sole purpose – it is not allowed to trade in business in any way. This company type pays a reduced rate on the annual fee to ASIC.
Company Limited by Guarantee
A Company Limited by Guarantee does not have shareholders and therefore cannot share profit between the members. As such, it is usually a more appropriate structure to use for non-profit organisations and charities. A Public Company Limited by Guarantee may be eligible for taxation concessions, such as Deductible Gift Recipient (DGR) endorsement.
A Public Company can offer shares to an unlimited number of shareholders with little restriction on who those members can be. Therefore, it is a structure through which capital can easily be raised for commercial ventures. This company will be unlisted – not listed on a stock exchange.
Home Unit Company
A Home Unit Company is a Special Purpose Company type, intended to be used to buy land and property within a corporate structure. The constitution contains sections covering matters such as the plans of the property, by-laws and lot entitlement tables. After being notified to ASIC as a Special Purpose Company, it is eligible for a reduced rate on the annual fee paid to ASIC.
Why incorporate your business through Patricia Holdings
Our partner, Patricia Holdings been registering Australian companies since 1968. It has a direct link to Australian Securities and Investments Commission (ASIC), which means that most company registrations can be completed within 10 minutes.
It is the go-to incorporation agent for accountants, solicitors and other professionals in Australia.
Benefits of registering a company for your business
By registering a company and running your business through it, you gain several advantages over operating it as a sole trader or partnership.
Many businesses prefer to trade with companies rather than self-employed individuals. Operating your business through a company can give the impression that it is larger than it may be, and that it is in business seriously.
If you operate as an individual or in partnership, you personally are liable to fulfil the obligations of every contract, including those that involve borrowing. If something goes wrong, you can be sued to recover the other side’s damages.
In law, a company is treated as a person separate to its owners. Limited companies, including Proprietary Limited Companies have limited liability. That means that if something goes wrong within the business (such as a debt cannot be repaid), the other party may sue the company up to the value of the capital in the business, but it cannot recover additional money from directors or shareholders.
Shares allow an incorporated business to be owned more flexibly than an unincorporated one. Multiple parties can have an interest in a business as a whole, and shares can be bought and sold. This allows for easier investment into a business by backers. The ability to sell shares also makes it easier for owners to exit a business without impacting on its ability to continue trading.
Companies can be used to reduce the tax that would be paid by an owner if the business was unincorporated.
Owners may be able to use differences in the rates of corporate income tax and capital gains tax, as well as the ability to change the timing of when income is received to minimise how much tax overall is paid.
Some types of company have specific purposes and are restricted from certain activities. However, often these types of company are eligible for lower tax rates than Proprietary Companies or individuals.