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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When you’re ready to start a company, it usually means you’re thinking bigger than a side project. You might be bringing on a co-founder, taking investment, signing larger clients, hiring staff, or simply wanting a cleaner, more “grown up” structure for your business.
But here’s the catch: starting a company in Australia isn’t just about filling out an online form and getting an ACN. If you want your company structure to actually protect you (and support growth), you’ll also need the right setup around ownership, decision-making, contracts, and compliance.
This checklist is designed for Australian founders and small business owners who want a practical, legally-focused roadmap. We’ll walk through the key steps involved in starting a company, what you can do yourself, and where it’s worth getting help so you don’t accidentally build on shaky foundations.
What Does It Mean To “Start A Company” In Australia?
In Australia, when people say they want to “start a company”, they usually mean registering a proprietary limited company (often written as “Pty Ltd”).
A company is a separate legal entity. In plain English: it’s its own “legal person”. That separation can be incredibly useful, especially when it comes to liability, contracts, and growth.
Why Many Small Businesses Choose A Company Structure
- Limited liability: generally, your personal assets are better protected if the business runs into debt or legal trouble (though personal guarantees, insolvent trading risk, and director duties can still create personal exposure).
- Clear ownership: shares make it easier to split ownership between founders (and potentially investors later).
- Professional credibility: some customers, suppliers, and partners prefer dealing with a company structure.
- Growth-friendly: companies are often better suited for scaling, employing staff, or bringing in capital.
Company vs Business Name (They’re Not The Same)
It’s common to register a business name and think you’ve started a company. But:
- Business name: a trading name you register so you can operate under that name.
- Company name: the registered legal name of the company, recorded with ASIC.
You can have both. For example, your company might be “ABC Consulting Pty Ltd” and you might register “ABC Studio” as your business name.
A Step-By-Step Checklist To Start A Company (The Core Setup)
If your main goal is to start a company in Australia and get it registered properly, these are the key steps most founders will move through.
1) Choose Your Company Type And Basics
Most small businesses register a proprietary company (Pty Ltd). You’ll also need to decide:
- Who the directors will be (the people responsible for running the company)
- Who the shareholders will be (the owners)
- How shares will be split (for example, 50/50, 70/30, or another structure)
Tip: if you have co-founders, it’s worth talking through “what if” scenarios early (what if someone wants to leave, what if someone stops contributing, what if you raise money). Those conversations are much harder later, when there’s more at stake.
2) Register The Company With ASIC
Company registration is done through the Australian Securities and Investments Commission (ASIC). Once registered, your company receives an Australian Company Number (ACN).
Many founders want to move fast here (understandably), but be careful: mistakes in ownership details or share structure can be annoying and costly to clean up later.
If you want a guided process with legal support, a structured Company Set Up can help you get the details right from day one.
3) Apply For An ABN And Set Up Your Tax Registrations
A company can apply for an Australian Business Number (ABN). Depending on your business model, you may also need to consider:
- GST registration (often required once you meet the turnover threshold, and also common earlier for B2B businesses)
- PAYG withholding if you employ staff
Tax registrations and how they apply to your specific circumstances can be complex, so it’s usually best to coordinate this with your accountant or registered tax adviser (this article is general information and isn’t tax advice).
4) Set Up A Registered Office And Records
Companies have ongoing record-keeping responsibilities. At a minimum, you should be ready to maintain:
- director and shareholder details
- share registers and share certificates
- company resolutions (decisions documented properly)
Good governance isn’t just “admin”. It can protect you if there’s a dispute later, if you bring in investors, or if you ever want to sell the business.
5) Plan For Ongoing ASIC Compliance And Director Requirements
Starting a company also means ongoing obligations. In practice, this often includes:
- ASIC annual review: most companies will receive an annual statement and need to pay an annual review fee and confirm (or update) company details.
- Keeping ASIC details up to date: if your address, directors, or share structure changes, there are timeframes for notifying ASIC.
- Director ID: directors generally need a director identification number, and it’s important to get this organised before appointment where required.
- Director duties: directors have legal duties (for example, to act with care and diligence and in good faith, and to avoid insolvent trading). These duties apply even in small companies.
How Do You Choose The Right Structure Before You Start A Company?
It’s worth pausing here, because not every business needs to incorporate on day one.
Before you start a company, make sure you’ve compared the company structure against the other common options:
- Sole trader: simple to set up, but you’re personally responsible for debts and liabilities.
- Partnership: can work for two or more people, but can create shared liability and can become risky without a strong partnership agreement.
- Company: more setup and admin, but typically better for liability protection and growth.
Questions To Ask Yourself
- Are you taking on higher-risk work (financially, safety-wise, or contract-wise)?
- Will you have co-founders, investors, or an employee team?
- Do you want to separate business and personal assets?
- Do you plan to scale, franchise, or sell?
If you’re unsure, it’s often better to get advice early rather than rushing into (or avoiding) incorporation. The “right” answer depends on what you’re building.
What Governance Documents Should You Have When You Start A Company?
Registering with ASIC creates the company, but governance documents help it run smoothly.
This is where many startups and small businesses get caught out. Everything feels fine until:
- a co-founder wants to leave
- someone stops pulling their weight
- you disagree on spending or strategy
- an investor asks, “What happens if…?”
A Company Constitution (Rules For How The Company Operates)
A Company Constitution sets out internal rules (things like director powers, how meetings work, share issues, and other operational mechanics).
Some companies rely on default rules (“replaceable rules”), but a tailored constitution can give you more clarity and control-especially if you have multiple shareholders or plans to grow.
A Shareholders Agreement (How The Humans Agree To Work Together)
A constitution is important, but it often doesn’t cover the commercial and relationship side of working together.
A Shareholders Agreement commonly deals with issues like:
- decision-making (including who gets a say and when)
- what happens if a shareholder wants to sell or exit
- how disputes are handled
- funding obligations and founder roles
- protections for minority shareholders (or control protections for majority shareholders)
If you have more than one owner, this is one of the most practical documents you can put in place as you start your company.
Key Laws And Compliance Areas You Should Plan For Early
When you start a company, it’s easy to focus on the registration process and forget about ongoing compliance. But legal compliance is where small businesses often face avoidable risk.
Here are the key areas to think about from the start.
Australian Consumer Law (ACL)
If you sell goods or services to customers, the Australian Consumer Law (ACL) will likely apply to you. This impacts how you advertise, how you handle complaints, and whether you can offer refunds, replacements, or repairs.
Even something as common as warranty language can create risk if it’s misleading. It’s worth understanding the basics around consumer guarantees, including how warranties are often discussed in practice (for example, warranty expectations and what you can and can’t promise).
Employment Law (If You’re Hiring Staff Or Contractors)
If your company will hire employees, you’ll need to comply with Fair Work requirements and have the right documentation in place from day one.
An Employment Contract is a strong starting point to clearly set expectations around duties, pay, confidentiality, IP ownership, and termination.
If you’re using contractors, make sure you don’t accidentally treat them like employees in practice. Misclassification can create real liability for your business.
Privacy And Data (Especially If You’re Online)
Many companies collect personal information without even realising it-think enquiry forms, email lists, online bookings, cookies, and customer accounts.
If your business collects personal information, a Privacy Policy is often a practical (and sometimes required) way to explain what you collect, how you use it, and how people can contact you about their data.
Intellectual Property (IP): Your Brand And What Makes You “You”
Your company name, logo, product names, domain name, and brand assets can become some of your most valuable business property.
As a general rule, it’s wise to check whether your brand is available before you invest heavily in marketing. If brand protection is important for your growth plan, it may make sense to register your trade mark.
Also remember: IP isn’t just about protection. It can become a commercial asset you license, sell, or leverage in a funding round.
Essential Legal Documents For Small Businesses Starting A Company
Beyond company registration, the biggest “real world” risks usually come from unclear agreements and misunderstandings.
Here are common documents that help reduce those risks when you start a company (you may not need all of them, but most businesses need at least a few).
- Customer Terms And Conditions / Service Agreement: sets the rules for what you provide, payment terms, delivery, limitations, and dispute handling.
- Website Terms: if you have a website or platform, this can help set rules for site use, disclaimers, and acceptable behaviour.
- Privacy Policy: explains how you collect and handle personal data (particularly important for online businesses).
- Supplier Agreement: useful if your business relies on manufacturers, suppliers, or logistics partners and you want clarity on quality, lead times, and liability.
- Non-Disclosure Agreement (NDA): helps protect confidential information when you’re sharing business plans, software concepts, designs, or commercial terms.
- Employment Agreements and Workplace Policies: clarifies expectations with staff and supports compliance (especially as your team grows).
- Shareholders Agreement and Constitution: helps prevent founder disputes and provides a framework for ownership and decision-making.
One practical tip: try to match the “weight” of the document to the risk. A simple low-cost project might need simpler terms, but if you’re taking deposits, handling sensitive data, selling online at scale, or working with high-value clients, stronger contracts become much more important.
Key Takeaways
- To start a company in Australia, you’ll typically register a proprietary limited company (Pty Ltd) with ASIC, then obtain an ACN and usually an ABN.
- Starting a company is more than registration-your share split, director setup, record-keeping, and ongoing ASIC obligations (like annual reviews) should be handled carefully to avoid painful fixes later.
- A Company Constitution and Shareholders Agreement are often the backbone of a well-run company, especially if you have co-founders or investors.
- Early compliance planning matters: Australian Consumer Law (ACL), privacy obligations, and employment law can all impact your day-to-day operations.
- The right legal documents (customer terms, privacy policy, employment contracts, supplier agreements, NDAs) help prevent disputes and protect your cash flow.
- For tax registrations like GST and PAYG withholding, it’s best to speak to an accountant or registered tax adviser so the setup matches your circumstances.
- Getting advice early can save time and money, especially when you’re building a company designed to grow.
If you’d like a consultation on how to start a company and set up the right legal foundations, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
