With the fluctuating economy, it is important to know where you invest your company. One of these investment options is to build your own private limited company. But due to the notorious difficulty of some government regulations, that can be difficult. Here are some tips for you to set up your own private limited company:
So what is a private limited company? Also called by other as proprietary limited company, it is a type of small business organisation that is a legal entity on its own. This means that the law sees the organisation as separate from that of its owners as well as its board. It is different from a corporation due to its scope as corporations tend to be bigger. It is also distinct from partnerships as the latter does not have a separate legal entity. Furthermore, it is not the same as a public limited company as private limited company can’t participate in a public stock exchange.
Stability: Even when shareholders pull out their investment from the company, a private limited company is relatively safer to changes within when compared to other business organisations.
Ease of raising funds: Private limited companies have two options to raise their funds: raising their debt and through selling their shares. Compared to other business structures, both these fundraising options will also be easier.
Limited liability: One of the greatest things about private limited companies is that it is relatively secure due to the limited liability clause. This means that if a company sinks and debt will be paid, shareholders are only required to pay the percentage of their ownership. Also, the business is a legally separate entity so you are safer from lawsuits.
Legal duties of directors: Directors of the company are bound to a code that they have to follow and the rules as well as procedures are strictly enforced.
High admin costs: Private limited companies usually have high costs in their admin operations though that amount is usually lower than those of publicly traded companies.
Required public disclosure of records: Due to it being a privately held company, it is needed to disclose company records such as annual reports, annual returns and the like.
Requirements: For a privately limited company to be registered in Australia, at least one director, at least one company secretary and 1-50 non-employee shareholders need to live in the country. The company should also have a physical Australian address for them to be registered.
There are two ways to register your private limited company in Australia. The first way is directly with the Australian Securities and Investment Commission (ASIC). You just lodge a paper form in an ASIC office, complete with the corporate register documentation. Once successful you will be given a certificate of registration. The second option is to go through an ASIC registered agent so that it would be easier, such as with Femia Accountants. We can help you complete the whole process quickly and effectively.
Contact our office today on 9316 4500 or book a time to meet with us.