If you’re thinking of starting a company, then you’re probably trying to figure out what it might cost. After all, finances are one of the most important aspects of running a company and it’s something you need to keep an eye on right from the very start.
So, what exactly does it cost to start a company?
Let’s take a closer look below.
Do You Need Money To Start A Company?
Yes, you do need money to start a company. The exact amount of money needed to start a company will depend on a number of factors. For example, the size of your company or the industry it’s in.
Even if you’re starting small, it’s still important to make sure you have the budget for the set up cost associated with establishing a company. As all companies are registered under the Australian Securities and Investments Commission (ASIC) you’ll need to make sure you’ve planned for things like registration fees and a few other set up costs.
How Much Does It Cost To Start A Company In Australia?
As of 2024, the registration cost for a company is somewhere between $474 and $576. Registration costs vary depending on the type of company you want to set up, so it’s important to have a clear idea of the kind of company you’d like to be running.
There’s also other costs. You will need to think about registering a business name, getting some important legal documents together and any ongoing obligations you may have with ASIC. As such, it’s important to set aside a reasonable budget for the set up costs of your company.
It’s difficult to determine an exact number for the set up costs of your company, as this will depend on the specific details of your company. If you want more information on the potential costs, our legal experts are happy to talk you through the ins and outs of setting up a company.
Does It Take A Long Time To Set Up A Company?
Aside from costs, it’s important to take a look at how much time it might take to get your company started. To register a company, you need to complete and submit a company registration application with ASIC. The actual application doesn’t take very long – however it will ask for certain details that you will need to be prepared with beforehand.
For example, you’ll need to sort out some company details like bank accounts, address, contact details and a few other things. It’s also a wise idea to be prepared with things like who your directors and shareholders are, as well as how your company might be governed.
We’ve written more about the time it takes to set up a company in our article: How Long Does It Take To Set Up A Company?. Check it out to know more.
Can One Person Start A Company?
Yes, one person can start a company. Even though you need directors and shareholders, under certain company types this can all be one person.
So, if your business ventures currently just consist of you then there’s no need to stress. It’s perfectly fine and legal, to start a company with just yourself. In fact, it is not uncommon for company owners to start their company’s with just themselves.
Can I Set Up A Company On My Own?
Whether you’re starting a company with just yourself or with employees, it’s a wise idea to get professional help when setting up your company.
It’s easy to think you’ll be fine with the application process on your own – and this might be true. However, a legal expert can help get your company set up the right way. There’s a lot of details when it comes to setting up a company that an experienced legal professional will be able to look out for. Plus, there’s also different types of companies such as a B-Corp or Dual Company that might be in your best interest to explore.
How you set up your company is going to lay the foundations for its future success. You only get one chance to do this, so it’s worth getting it done correctly.
What If I Don’t Set Up A Company And Just Run A Business?
There’s also the option of not setting up a company at all. Without setting up a company, you could run your business as a sole trader or in a partnership. In order to do this, you’ll just need to apply for your ABN. Getting an ABN is free and the process is a lot less complicated. However, as a sole trader or in a partnership, there’s very limited legal protection. You will be personally liable for what happens in the business. Moreover, a sole trader or partnership structure doesn’t provide a good foundation for a business’s growth or expansion.
Setting up a company comes with extra cost and care however, it is the more legally secure option. A company is considered to be a legal entity on its own. This means, the company can do many things that a legal person can, such as own and sell property, be involved in court matters, earn a profit or work up debt. As a result, your personal liability is limited. A company is also the more suitable structure if you plan on expanding your venture into the future.
Setting up a company comes with its own set of costs and it can be a somewhat time consuming process. However, it’s the business structure that provides the most legal protection. As such, a company structure is almost always recommended for anyone thinking about stepping into the business world. To summarise what we’ve discussed:
- Starting a company requires financial investment, and the cost varies based on factors like company size and industry
- In Australia, as of 2024, company registration costs range from $474 to $576, with additional expenses for business name registration and legal documents
- The time to set up a company is relatively short, but thorough preparation with details such as bank accounts, addresses, and governance is crucial
- One person can start a company, serving as both director and shareholder, which is common among solo entrepreneurs
- Professional help is recommended for setting up a company, as legal experts can navigate complexities and identify the best company type for your needs
- Choosing not to set up a company and operating as a sole trader or in a partnership is an option, but it comes with limited legal protection and growth potential
- Despite the costs and time involved, setting up a company offers greater legal security, acting as a distinct entity and providing a solid foundation for future expansion
If you would like a consultation on the costs of setting up a company, you can reach us at 1800 730 617 or firstname.lastname@example.org for a free, no-obligations chat.
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