Australian Company Setup Costs: A Practical Guide

Thinking about setting up a company in Australia? It’s an exciting step towards building a business with better protection, more credibility, and room to grow. But one of the first questions we’re often asked at Sprintlaw is: “What are the real costs involved in company setup?”

Understanding your company setup costs - from government fees to professional services and ongoing compliance - is crucial for planning your launch and avoiding unwanted surprises. With the right guidance and some upfront preparation, you can align your budget and focus your energy on building your business vision.

In this guide, we’ll break down the essential costs you’ll face during company formation in Australia, explain why each step matters, and help you map out a clear (and cost-effective) pathway to getting started the right way. Whether you’re a solo entrepreneur, teaming up with co-founders, or scaling from a sole trader structure, we’re here to help you navigate the numbers and the legal essentials.

What Does “Company Setup” Actually Mean?

When we talk about “company setup costs”, we’re usually referring to creating a separate legal entity with the Australian Securities and Investments Commission (ASIC). This means you’ll have an Australian Company Number (ACN), limited liability protection, and extra obligations as a Pty Ltd company compared to a sole trader or partnership.

The costs and processes below focus on this formal company structure, rather than options like sole trader or partnership. If you’re still weighing up what’s right for you, check out our comparison of ABN vs ACN or sole trader vs company for an overview of the differences.

Planning Your Business Approach: Is Company Setup The Right Move?

Before putting your money down for company formation, make sure this is the right path for your business. Companies come with extra protection and flexibility, but also more paperwork, compliance obligations, and up-front costs.

• Limiting personal liability: A company is its own legal entity. This means your personal assets are usually protected if there’s a business debt or lawsuit.

• Attracting investors and growth: Investors and partners typically prefer companies for clear governance and share structures.

• Setup and compliance costs: Companies are more expensive to set up and run, with ongoing reporting and legal requirements.

• Tax opportunities: Companies have a flat tax rate (commonly 25% for base rate entities, otherwise 30%), which can be advantageous depending on profits and goals.

If you’re ready to proceed, let’s break down those company setup costs in detail.

Step-By-Step Company Formation Costs: What Will You Pay?

Let’s walk through each step involved in registering and setting up a proprietary company in Australia - and the expenses you’ll encounter at each stage.

1. ASIC Company Registration Fee
   The key upfront cost is the government fee to register a new company with ASIC. As a guide, the standard fee for registering a proprietary limited company has been around $576 (reviewed annually). You pay this whether you lodge directly with ASIC or via a trusted service provider.

2. Director ID (Required, $0)
   Every director must obtain a Director ID from the Australian Business Registry Services before being appointed. There’s no fee, but build this into your timeline.

3. Professional or Legal Fees For Company Setup
   DIY is possible, but many founders use a lawyer or accountant to get the structure right and avoid costly mistakes. Typical all-inclusive packages range from about $600–$1,500 depending on complexity. More complex setups (multiple classes of shares, overseas shareholders, bespoke constitution) can cost more.

4. Company Constitution (Optional, But Recommended)
   If you don’t provide a constitution, your company uses ASIC’s replaceable rules by default. A tailored constitution can reduce friction between co-founders and clarify decision-making. Typical standalone drafting costs: $250–$700, often included in setup packages.

5. Business Name Registration (If Trading Under a Different Name)
   If you plan to use a trading name that’s not your company’s legal name, register a business name with ASIC. Fees are $39 for 1 year or $92 for 3 years per name.

6. ABN, TFN, and GST Registration
   Registering a company ABN and TFN is free. GST registration is free and mandatory once your turnover is expected to exceed $75,000 per year. Many startups register early for readiness and invoicing.

7. Other Licences and Permits
   Depending on your industry and location:

• Council permits (premises or home-based businesses): roughly $100–$600+

• Health, food or safety licences: roughly $50–$1,000+

• Professional registrations or memberships: roughly $100–$1,500+

8. Insurance Costs (Highly Recommended, Variable)
   Consider public liability, professional indemnity, cyber, and other covers suited to your risk profile. Premiums often start in the low hundreds annually for small operations.

9. Ongoing ASIC Fees and Annual Review Costs
   ASIC charges an annual review fee to keep your company active. As a guide, the proprietary company annual review fee has been around $310. Also budget for late fees if deadlines are missed, and any registered agent or company secretarial support you use.

Additional Company Formation Costs To Consider

• Domain names: typically $10–$40 per year

• Trade marks: government fees often start from $250 per class, per mark

• Professional advice: legal, tax and accounting setup or structure advice

• Software and tools: bookkeeping, payroll, CRM and other operational systems

Preparation is key - scoping your operational needs upfront helps you stay on budget.

Which Business Structure Should I Choose, And How Does It Affect Setup Costs?

Choosing a structure isn’t just about price, but costs do differ.

• Sole trader: Cheapest and simplest. ABN is free, business name $39–$92. Minimal compliance but no personal asset protection.

• Partnership: Similar to sole trader, but with a partnership agreement strongly recommended.

• Company (Pty Ltd): Higher upfront and ongoing costs but offers limited liability and easier access to investment. A professionally set up company commonly lands in the $700–$2,200 range once you factor essentials.

What Legal Documents Will I Need When Setting Up A Company?

These often make up the “hidden” setup costs because most new companies need them early:

• Company Constitution: Your internal rules (often bundled in setup).

• Shareholders Agreement: Essential with more than one owner - covers roles, exits, and dispute resolution.

• Service Agreements or Terms and Conditions: Set client expectations and limit liability.

• Privacy Policy: Mandatory if you’re an APP entity under the Privacy Act 1988 (for example, businesses with over $3 million annual turnover or that meet specific criteria like health service providers or trading in personal information). Even if you’re not legally required, a clear privacy policy is best practice if you collect personal data.

• Employment Agreements and Workplace Policies: Required if you’ll employ staff or engage contractors.

• NDAs and IP Assignments: To protect confidential information and ensure IP created for the business is owned by the company.

• Trade Mark Registration: To protect your brand.

You may not need every document on day one, but the right contracts reduce risk and prevent expensive disputes later.

What Laws Do I Need To Follow When Setting Up My Company?

Company formation is just the start - each company has ongoing legal obligations.

• ASIC corporate law: Keep details current, pass annual review, and lodge required changes.

• Australian Consumer Law (ACL): Truthful marketing, fair trading, and proper refund practices.

• Employment law: Fair Work, awards and WHS if you hire staff.

• Privacy and data protection: Privacy Act obligations apply if you’re an APP entity or meet a listed exception - regardless, handle personal information responsibly.

• Intellectual property: Register trade marks and avoid infringing others.

• Tax law: Company income tax, BAS and GST if registered.

Many of these carry penalties for non-compliance, so include ongoing compliance in your yearly budget.

Can I Buy An Existing Company Or Franchise Instead?

Yes - both paths can speed up market entry, with different cost profiles.

• Buying an existing company: Factor in purchase price, legal and financial due diligence, and transfer costs.

• Joining a franchise: Expect an upfront franchise fee, ongoing royalties, and strict compliance with the Franchising Code and brand standards.

Allow from a few thousand dollars to tens of thousands for due diligence and contract reviews depending on size and complexity.

Key Takeaways

• Typical company setup costs include ASIC fees, professional advice, business name registration, essential legal documents, and ongoing compliance.

• A professionally set up company often sits around $700–$2,200 once you include the common essentials.

• Your total cost depends on structure, licensing needs, headcount, and whether you need bespoke documents.

• Strong contracts and policies are a crucial part of the initial outlay and reduce long-term risk.

• Ongoing compliance with ASIC, tax, employment, privacy, and consumer law should be budgeted each year.

• Getting the right legal guidance early can save money and headaches as you grow.

If you would like a consultation on determining your company setup costs - or tailored legal guidance to get your new company off the ground - you can reach us at team@sprintlaw.com.au or call 1800 730 617 for a free, no-obligations chat.