3 useful tips before starting your business in Australia
Updated: 9 December 2019
You can avoid the stress of knowing where to start with these 3 useful pre-launch tips before starting your business in Australia.
1. Business structure
In Australia, there are 4 main business types: (1) sole trader, (2) partnership, (3) trust and (4) company.
Each business structure has it’s pro’s and con’s.
Taxes, cost and ease of setup are usually big deciding factors.
While you can change your structure at a later stage, there can be lots of work involved, so it’s a good idea to pick the best structure for your business from the start.
Here’s a simple overview of each business type:
- Sole trader - easy and cheap to set up, you are taxed at individual tax rates. However you are personally liable for the business.
- Partnership - a group of up to 20 people that work together with a common view to make a profit. Partnerships are a common structure in many professional services businesses like accounting and law firms.
- Trust - a trustee holds business assets for the benefit of others known as beneficiaries. You will need a trust deed to set out how the trust will function. Trusts are popular for tax planning purposes.
- Company - a company is a separate legal entity that can sue and be sued. Company assets and liabilities are separate to your personal assets and liabilities so this is a big draw card to the company structure and it's sometimes referred to as 'limited liability'.
Feeling stuck deciding ?
A lawyer or accountant can also give you guidance about the best structure for your business situation.
2. Your business name
When you choose your business name, it’s important that you choose a name that’s available AND also does not place you at risk of being sued by another business.
Even if you see that your business name is available on the Australian Securities and Investment Commission (ASIC) register or that your chosen domain is available, the name you choose cannot be similar to a competitor's so that it confuses or misleads customer's.
Also, ASIC has some rules about the business name that you pick; it cannot:
- be already registered; or
- identical or nearly identical to a name already registered to another entity; or
- include words or phrases that are restricted, offensive, could imply a connection to a government or similar organisation.
3. Timeframes and proof of identity
You can set up your company set up in minutes if you have the right information at your fingertips.
However, setting up an ABN can take longer, in some cases up to 28 days (for example, if you have a director that is overseas and needs to supply proof of identity documents).
If you are setting up a partnership or trust - you should also factor the time it will take for a lawyer to draft your agreement or deed.
Proof of identity
If you are a non-resident applying for an ABN, you will need to provide 2 proof of identity documents, one from the primary documents list and the other from the secondary documents list.
- Primary documents include foreign birth certificate, foreign passport, Australian birth certificate and Australian passport.
- Secondary documents include national photo identification card, foreign government identification, marriage certificate (if provided to verify your change of name it will not be classified as a second document) and driver licence (the address on the licence must match the home address provided).
Here are the Australian Government's proof of identity requirements for non-residents.
Bringing it all together
As a re-cap, when setting up a business in Australia, keep in mind:
- there are 4 main structures in Australia - sole trader, partnership, company and trust.
- choose a structure that work’s for you in the long term and get advice from the outset if you need it.
- keep in mind the time frames for setting up and getting proof of identity documents confirmed: obtaining a Australian Company Number can take minutes, setting up an Australian Business Number can take up to 28 days in some cases.
Got questions or comments about setting up in Australia? Be sure to leave them below.
I wish you success in your ventures!