There are many ways to structure your business, but the most common is to set up as a company. Registering your company is an exciting step in your business development journey and assists in laying the foundations for you to grow, recruit, open investment and beyond.
In Australia, companies are registered through ASIC (the Australian Securities and Investments Commission). If you have decided to structure your business as a company you will need to apply to register with ASIC.
WHAT DOES IT COVER?
During the early stages of your company the directors and shareholders will likely be one and the same. But as you look to grow the company, seek capital or sell this will inevitably change. At this stage it's important to remember that directors and shareholders play very different roles in a company. Simply put: directors govern, shareholders own. This consideration will play a role into how you wish to incorporate your company.
Incorporating as a Pty Ltd (Proprietary Limited) company allows for this separation of directors and shareholders. A Pty Ltd company allows for equity to be distributed/allocated to shareholders.
WHY IS THIS IMPORTANT?
By registering your company with ASIC and making the move to incorporate, you are taking your business from the ideation stage into the real world. If this sounds confusing, it's because it is. Many startups try to register companies themselves however often insert incorrect share allocations, share payments and misunderstand the basic mechanics of the company structure. Leave it to us to deal with the headaches of registering your company.