Step-By-Step Guide To Setting Up A Company In Australia

Thinking about setting up a company in Australia? Whether you’re building a scalable tech startup or launching a local service business, incorporating can be a smart way to protect your personal assets, build credibility, and lay the groundwork for growth.

If you’re feeling unsure about the process, you’re not alone. There are a few moving parts - from choosing a structure to meeting ASIC and tax requirements - but once you break it down into steps, it’s very manageable.

In this guide, we’ll walk you through how to set up a company in Australia, what it costs, the legal requirements to keep in mind, and the key documents that help you operate with confidence.

What Does “Setting Up A Company” Actually Mean?

In Australia, a company is a separate legal entity registered under the Corporations Act. This means the company can enter contracts, own property and bear debts in its own name. In practice, that separation usually provides limited liability protection for owners (shareholders).

Compared to operating as a sole trader or partnership, a company structure often suits founders who:

• Want to limit personal exposure to business risks and debts
• Plan to bring on co-founders or investors
• Need a more formal vehicle for credibility with customers, suppliers, and banks
• Intend to build a brand that can scale

If you’re ready to move forward, you can register the company yourself or get help from a lawyer to manage the setup end-to-end. If you want a team on your side, our lawyers can handle your Company Set Up for you.

Step-By-Step: How To Set Up A Company In Australia

1) Map Out Your Plan And Model

Before the paperwork, spend time on the basics. Clarify your value proposition, target market, pricing, cash flow assumptions and near-term goals. This isn’t just a “nice to have” - it guides decisions about structure, funding, and risk.

• Your product or service, and how it solves customer problems
• Your sales channels (online, bricks-and-mortar, B2B, marketplace)
• Startup costs and ongoing expenses
• How you’ll acquire and retain customers
• When you might add co-founders, staff or investors

2) Choose Your Business Structure

You don’t have to incorporate to start trading, but many founders choose a company for the liability protection and growth options. Broadly, your choices are:

• Sole trader: Simple and inexpensive to start. You control everything, but you’re personally liable for business debts.
• Partnership: Two or more people share control and profits. Liability can still be personal.
• Company (Pty Ltd): A separate legal person, with limited liability for shareholders and more formal compliance.

If a company is the right fit, the rest of this section explains how to register and set it up correctly.

3) Confirm Director And Shareholder Details

Every proprietary company needs at least one director who is ordinarily resident in Australia. Make sure your proposed directors are eligible and understand their legal duties to act in the best interests of the company and to keep proper records.

Directors also need a director ID (issued by the Australian Business Registry Services). This is a one-time personal identifier you’ll need to have in place. If you’re unsure about residency or eligibility rules, see our guide to Australian Resident Director Requirements.

4) Pick A Company Name (Or Use Your ACN)

Choose a unique name that isn’t identical or too similar to an existing registered name. Avoid restricted words and anything misleading. You can also decide to register the company without a name and trade under the company’s Australian Company Number (ACN) - many people prefer a brand name, but it’s optional.

If you want a trading name that’s different from the legal company name, register it as a business name (you can do this for one or three years).

5) Decide Your Registered Office And Principal Place Of Business

Your registered office is the address where official notices from ASIC can be sent. You must have written consent from the occupier, and the address can’t be a PO box. The principal place of business is where you mainly carry on activities.

Some founders use a home address initially and change later. If you’re weighing up options, it helps to understand the rules around using residential addresses for company registration.

6) Set Your Share Structure

Companies in Australia issue shares with no par (face) value. When you register, you’ll specify the number and class of shares to be issued and the amount paid (or payable) for those shares. You can keep it simple at the start - for example, ordinary shares with equal rights - and evolve your structure as you grow.

If you’ll have multiple founders or investors, agree early on ownership percentages, vesting (if any) and decision-making rules. This is where a clear Shareholders Agreement makes a big difference.

7) Register The Company With ASIC

When you’re ready, submit your application to the Australian Securities & Investments Commission (ASIC). You’ll need:

• Company name (if you’re not using the ACN)
• Registered office and principal place of business details
• Director and shareholder details
• Share structure (number and class of shares, and the consideration paid or payable)

Once approved, ASIC issues your Australian Company Number (ACN) and a certificate of registration. After that, you can apply for your Australian Business Number (ABN) and relevant tax registrations (for example, GST and PAYG withholding if required). Speak with your accountant about the right timing and registrations for your situation.

8) Adopt A Company Constitution (Or Use Replaceable Rules)

On registration, you can choose to operate under the Corporations Act’s replaceable rules or adopt a tailored Company Constitution. Replaceable rules can work for very simple companies, but if you have co-founders, investors, or plan to scale, a constitution tailored to your needs gives you more clarity and control.

9) Put Your Core Legal Documents In Place

Registration is just the start. A solid legal foundation helps prevent disputes and builds trust with customers, staff and investors. Consider the following essentials:

• Shareholders Agreement: Sets expectations between founders and investors on ownership, governance, issuing new shares, exits and disputes. A well-drafted Shareholders Agreement can save significant cost and stress later.
• Customer Terms: Clear sales or service terms help you manage scope, payments, liability and refunds. For online businesses, website or platform terms may be appropriate.
• Employment Agreements: Hiring staff? An Employment Contract sets out duties, pay, confidentiality, IP ownership and termination terms, aligned with Fair Work obligations.
• Privacy Policy: If you collect personal information, you need to understand your privacy obligations. Some companies are legally required to have a Privacy Policy (for example, many health service providers or larger businesses that meet thresholds under the Privacy Act). Even where not strictly required, it’s often best practice for transparency and customer trust.
• NDAs and Commercial Agreements: Use non-disclosure agreements when discussing confidential information and make sure your supplier, distributor or reseller agreements reflect how you operate.

Getting these right from day one reduces risk and makes you “investor ready” if you decide to raise capital.

10) Open Your Company Bank Account And Set Up Operations

With your ACN and ABN in hand, open a company bank account and separate company finances from personal funds. Set up your accounting system, invoicing, payroll (if applicable), and basic record-keeping. From here, you can launch with confidence.

How Much Does It Cost To Register A Company?

There are a few categories of costs to budget for. Exact amounts can change over time, so always check current fees before you apply.

• ASIC registration fee: ASIC charges a government fee to incorporate a company. This fee is indexed periodically, so check ASIC’s website for the current amount.
• Business name registration: If you want a trading name that’s different from the company’s legal name, there’s a separate one- or three-year fee when you register your business name.
• Legal and compliance costs: Budget for a constitution, a shareholders agreement, customer terms, employment contracts and any industry licences you need. These costs vary based on complexity.
• Other setup costs: Think about domain name registration, website build, software, insurance and branding.

In practical terms, many startups spend a few hundred dollars on government fees and a further amount on legal documents and professional support, depending on how tailored your setup needs to be.

What Ongoing Obligations Will Your Company Have?

After registration, your legal responsibilities continue. Plan for these ongoing tasks:

• Annual ASIC review: ASIC issues an annual statement that you need to review and pay the review fee to keep your company in good standing.
• Company records: Keep registers up to date (members, options, charges where relevant), record director/shareholder decisions, and notify ASIC of changes (like a new address or share issue) within required timeframes.
• Solvency resolutions: Directors must pass a solvency resolution within set deadlines each year - see our overview of solvency resolutions.
• Tax and payroll: Lodge required returns, pay taxes, and meet superannuation and PAYG obligations if you have employees. Your accountant can advise on timing and thresholds (including GST).
• Licences and permits: Renew industry-specific licences or local permits as needed.
• Policies and contracts: Maintain compliant workplace policies and update customer terms and privacy notices as your business evolves.

Good governance and clear record-keeping make life easier at audit time, during funding rounds, or if you sell the business later.

Which Laws Apply - And What Should You Watch Out For?

Corporations Law Basics

Companies must comply with the Corporations Act and ASIC requirements. This includes appointing at least one Australian-resident director for a proprietary company, maintaining a registered office, keeping accurate records, and ensuring directors have and maintain their director ID.

Employment Law

If you employ staff, you need to comply with the Fair Work framework, including minimum entitlements, modern awards, superannuation and workplace health and safety. Put proper contracts in place for employees and contractors, and make sure your onboarding includes confidentiality and IP ownership terms.

Australian Consumer Law (ACL)

If you’re selling goods or services, the ACL applies. It governs things like consumer guarantees, refunds, unfair contract terms and advertising. Ensure your customer terms and marketing practices are compliant - it’s essential for customer trust and reduces dispute risk.

Privacy And Data

Understand your obligations under the Privacy Act and the Australian Privacy Principles. Some companies are “APP entities” and must comply (including having a compliant privacy policy and processes). Others may still choose to publish a Privacy Policy to build trust and meet customer expectations. If you handle health information, credit information or operate certain online platforms, stricter rules can apply.

Intellectual Property

Your brand is an asset. To reduce the risk of copycats and brand confusion, consider registering your trade mark for your name and logo. Our team can assist you to register your trade mark in the right classes. Also make sure you’re not infringing anyone else’s IP when you launch.

Tax And Finance

Make an early plan with your accountant for ABN, GST (if applicable), PAYG and super. This guide is general information - you should get tailored tax advice for your specific model and cash flow.

What Legal Documents Does A New Company Typically Need?

Every business is different, but most companies will benefit from a core set of contracts and policies. These documents set expectations, allocate risk and help you manage day-to-day operations smoothly.

• Company Constitution: Your internal rulebook that complements the replaceable rules and aligns governance with your goals. See our Company Constitution service.
• Shareholders Agreement: Covers ownership, voting, founder exits, dividends and dispute resolution. A clear Shareholders Agreement helps prevent misunderstandings between co-founders.
• Customer Terms (or Service Agreement): Defines scope, fees, delivery, warranties, liability limits and termination. For online businesses, these often appear as website or platform terms.
• Employment Contract: Outlines entitlements, confidentiality, IP ownership, restraints (if appropriate) and termination processes. Start with a compliant Employment Contract and build out your policies from there.
• Privacy Policy: Required for many companies and best practice for most. A tailored Privacy Policy explains what data you collect and how you handle it.
• Contractor Agreements: If you engage independent contractors, set terms that reflect the engagement and avoid misclassification risks.
• NDAs (Confidentiality Agreements): Use these when sharing sensitive information with suppliers, potential investors, or strategic partners.
• IP Assignment Clauses: Ensure intellectual property created by employees or contractors is owned by the company.

You may not need every document on day one, but putting the right ones in place early helps you move faster and reduces risk as you hire, scale or seek investment.

Key Takeaways

• Setting up a company in Australia gives you a separate legal entity, which usually means limited liability and a more credible platform for growth.
• Work through the steps methodically: confirm directors (including residency and director IDs), choose a name, set your addresses, decide share structure, register with ASIC, and adopt internal rules.
• Costs include government fees (which change from time to time), business name registration if needed, and legal documents to get your house in order.
• Ongoing obligations matter: annual ASIC review, solvency resolutions, timely notifications of changes, and good record-keeping will keep you compliant.
• Make sure you comply with employment laws, the Australian Consumer Law, privacy obligations and IP rules from day one.
• Core documents such as a Company Constitution, Shareholders Agreement, customer terms, Employment Contracts and a Privacy Policy provide clarity and protect your business.
• If you want support, our lawyers can handle your Company Set Up and tailor documents for your model and growth plans.

If you would like a consultation on setting up a company in Australia, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.