Alex is Sprintlaw's co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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Thinking about building a business that can scale, attract meaningful investment or even list on the ASX one day? Moving to a public company structure can open serious doors - but it also brings extra rules, reporting, and governance obligations you’ll want to understand from the outset.
In this guide, we’ll break down what a public company is in Australia, how it differs from a proprietary (private) company, the steps to set one up, and the key legal and compliance issues to manage as you grow. We’ll also point you to the core legal documents that keep governance tight and investors confident, so you can decide if this structure fits your goals.
What Is a Public Company in Australia?
A public company is a company registered under the Corporations Act 2001 (Cth) that can offer securities (like shares or debentures) to the public and is not limited to 50 non‑employee shareholders. By contrast, a proprietary company (Pty Ltd) is capped at 50 non‑employee shareholders and generally can’t make public offers.
Public companies can be either listed (for example, on the ASX) or unlisted. Both are regulated by the Australian Securities and Investments Commission (ASIC) and must meet more rigorous governance and disclosure standards than private companies.
Common types include:
- Public companies limited by shares: The standard choice for for‑profit businesses seeking to raise capital by issuing shares.
- Public companies limited by guarantee: Typically used by not‑for‑profits and charities; members guarantee a nominal amount if the company is wound up.
In this article, we focus on public companies limited by shares.
Public vs Proprietary: What’s the Difference?
Many businesses start as proprietary companies and later transition to a public structure as they scale. Here are the practical differences most founders care about:
- Shareholders: Proprietary companies are limited to 50 non‑employee shareholders. Public companies have no such cap.
- Fundraising: Proprietary companies can’t raise capital from the public in the same way. Public companies can offer securities to the public (subject to disclosure rules).
- Board and company secretary: Proprietary companies need at least one Australian‑resident director. Public companies must have at least three directors (at least two ordinarily resident in Australia) and at least one Australian‑resident company secretary. If you’re appointing directors, check the Australian resident director requirements early.
- Reporting and audits: Public companies must prepare and lodge audited financial reports and, in most cases, hold annual general meetings (AGMs). Proprietary companies have more limited reporting obligations (though “large” proprietary companies also face audits).
- Listing: Only public companies can list on a securities exchange such as the ASX. However, you can remain unlisted and still be a public company.
- Visibility and scrutiny: Public companies operate under more market and regulatory scrutiny. That transparency can build trust - but it also demands robust governance.
In short, public companies trade simplicity for scale: you gain access to public capital and market credibility, but your governance, disclosure and compliance obligations increase accordingly.
Listed vs Unlisted: Which Path Fits Your Strategy?
There are two main paths for public companies:
Listed Public Company
Listed companies trade their shares on an exchange like the ASX. They must comply with both the Corporations Act and the ASX Listing Rules, including continuous disclosure (i.e. promptly releasing price‑sensitive information to the market). Listing can provide liquidity for shareholders, visibility, and access to capital - but it brings significant cost and process, along with ongoing market disclosure.
Unlisted Public Company
Unlisted public companies can still raise funds using disclosure documents (for example, a prospectus), and many pursue growth without the costs of listing. Importantly, some unlisted public companies are “disclosing entities” (for example, due to the nature of their securities or number of holders) and are subject to continuous disclosure and periodic reporting similar to listed entities. Whether you’re listed or unlisted, assess your disclosure status carefully and build compliance processes early.
If fundraising is your priority but listing isn’t right yet, you may also explore regulated options like crowd‑sourced funding (CSF) within the Corporations Act framework. The right path depends on your stage, investor strategy and appetite for market obligations.
How To Start a Public Company in Australia (Step‑By‑Step)
1) Set Strategy and Model Your Funding Plan
Clarify whether you’re aiming for an ASX listing in the near term or plan to remain unlisted while raising capital. Consider investor profiles, the timing and cost of audits, and the governance capacity you’ll need. This upfront strategy will drive your timetable, resourcing and documentation.
2) Choose the Company Type
For a commercial venture, a public company limited by shares is standard. If your purpose is primarily charitable or community‑focused, a company limited by guarantee may be more appropriate.
3) Build Your Board and Appoint a Company Secretary
Public companies must have at least three directors (at least two ordinarily resident in Australia) and at least one Australian‑resident company secretary. Each director needs a Director ID prior to appointment. Balance your board with the right mix of industry, finance and governance expertise.
4) Adopt a Fit‑For‑Purpose Constitution
Most public companies adopt a tailored Company Constitution that sets out rules for board powers, share classes, meetings and decision‑making. A robust constitution helps avoid disputes and gives investors confidence that governance is clear.
5) Register the Company With ASIC
Apply to ASIC to register as a public company limited by shares. Once approved, you’ll receive an ACN. From there, register for an ABN and (if applicable) GST. Keep in mind this information is general in nature - it’s important to obtain independent tax advice on ABN/TFN/GST and corporate tax matters to suit your specific situation.
6) Put Governance, Disclosure and Record‑Keeping Systems in Place
Design early for compliance. This includes board and committee charters, conflict management processes, disclosure controls (especially if you’re a listed entity or a disclosing entity), financial reporting calendars and AGM planning. Good governance is both a legal requirement and a practical necessity for scaling.
7) Prepare for Capital Raising
If you plan to raise funds, you’ll need compliant disclosure (such as a prospectus or other eligible offer document) and clear investor communications. Before any offer, ensure your cap table is accurate, share classes are defined, and your founders’ and executives’ contracts are in place.
Legal and Compliance Essentials for Public Companies
Directors’ Duties and Governance
Directors must act in good faith in the best interests of the company, for proper purposes, with due care and diligence, and avoid improper use of information or position. These duties set the tone for your entire governance framework and apply regardless of whether you’re listed or unlisted.
Reporting, Audit and Meetings
Public companies must prepare annual financial reports, have them audited, lodge them with ASIC and (in most cases) hold an AGM. Listed companies - and unlisted companies that are “disclosing entities” - must also meet continuous disclosure and periodic reporting obligations.
Employment Law
If you employ staff, you must comply with the Fair Work Act 2009, workplace health and safety laws, and any applicable modern awards. Clear, compliant Employment Contracts and workplace policies help set expectations and reduce disputes as you scale.
Consumer Law
All businesses dealing with customers must comply with the Australian Consumer Law (ACL), including rules on fair trading, product safety, guarantees and refunds. Your marketing, sales processes and customer terms should reflect these obligations.
Privacy and Data Protection
Many public companies will be “APP entities” under the Privacy Act 1988 (Cth) - for example, because annual turnover exceeds $3 million, they handle sensitive information, or specific privacy rules otherwise apply. If you’re an APP entity, you must have a compliant Privacy Policy and adopt appropriate data handling practices. Even if you fall outside the default thresholds, strong privacy practices are a smart baseline for trust and risk management.
Intellectual Property
Copyright protection arises automatically in Australia (no registration system), but you can actively protect brand assets by seeking to register your trade mark for your name and logo. Consider design registration or patents where relevant to your products or technology. Equally important, make sure you’re not infringing someone else’s IP before you launch or rebrand.
Tax and Finance
Register for an ABN and company TFN, and register for GST if your projected turnover is at or above the threshold. Public companies typically engage external accounting and audit support. This is general information only - obtain tailored tax advice for your fundraising, share plans and corporate structuring.
What Legal Documents Will You Need?
The right documents create clarity, reduce risk and help you meet legal obligations from day one. Common documents for Australian public companies include:
- Company Constitution: Governs board powers, meetings, share classes, dividends and decision‑making.
- Shareholders Agreement: Sets expectations among founders and early investors around ownership, voting, exits, and dispute resolution (often used before listing or in unlisted phases).
- Directors Service Agreement: Clarifies duties, remuneration and confidentiality for directors and executives - crucial for accountability and investor confidence.
- Whistleblower Policy: Supports lawful reporting of misconduct and helps meet Corporations Act whistleblower protections.
- Privacy Policy: Required for APP entities and recommended for any organisation handling personal information.
- Employment Contract: Sets clear terms for employees, including duties, confidentiality and IP ownership.
- Customer Contract: Defines service scope, pricing, warranties, liability and termination - aligned with the ACL and your risk appetite.
You may also need offer documents for capital raising, board and committee charters, securities registers, and a suite of governance and risk policies (e.g. continuous disclosure, securities trading, anti‑bribery and corruption). If you’re executing documents, it’s worth understanding options to execute under section 127 of the Corporations Act for company execution.
Is a Public Company Right for You?
A public company can be a powerful structure if you’re planning to scale, invite institutional or widespread investment, or position for an ASX listing in time. The trade‑off is a more demanding compliance environment - boards, audits, disclosure controls, and rigorous record‑keeping become part of business as usual.
It’s also legitimate to stay private for longer. Plenty of high‑growth companies remain proprietary (Pty Ltd) until they’ve built out governance capacity. Others choose an unlisted public company for access to fundraising options without the costs of listing. The right answer depends on your growth plan, investor base and readiness for public company obligations.
Key Takeaways
- A public company can raise capital from the public and scale ownership beyond 50 shareholders, but it comes with tighter governance, disclosure and audit requirements.
- Listed entities must comply with the ASX Listing Rules and continuous disclosure; some unlisted public companies are “disclosing entities” and face similar obligations.
- Public companies require at least three directors (two resident in Australia) and at least one Australian‑resident company secretary, plus robust governance processes.
- Plan for annual audits, ASIC lodgements and AGMs, and build systems for financial reporting, disclosure controls and investor communications.
- Protect your position with core documents like a Constitution, Shareholders Agreement, Directors Service Agreement, Privacy Policy and Employment Contracts.
- Tax and GST registration details are general in nature - get tailored advice for your specific fundraising and structuring plans.
If you’d like a consultation on setting up or managing an Australian public company, contact Sprintlaw at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.
