Starting and running a successful business is a dream for a lot of entrepreneurial people. Having an idea and successfully translating it into a profit-making business can be a challenge. Considering a failure rate of almost 87% for small business (source), we know it’s not easy going. We, as business consultants and accountants, can help ease some of the complexities by making it easy for you to start up and manage your business.
It’s not all doom and gloom, and we have some encouraging statistics as well.
For more details, check out Australian business statistics.
The responsive markets enable companies to run their businesses with ease and flexibility. If you are aspiring to start a business in Australia, we have got you covered from the initial process of online company registration!
Here, you’ll learn everything that’s required to register your business name to set your commercial operations up and running.
Content of the guide:
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Business name registration
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Dos and Don’ts for choosing a business name
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Trading name
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Personal name
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Business structure
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Before registering your business name
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Australian Business Number
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Protect your business name
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ASIC
Let’s get started:
Business name registration –
A business name is basically the name in which your business will operate. It’s imperative to register the business name if you want to run it under a different name, which is not your own.
Dos and Don’ts to choose a valid business name –
There are some DON’Ts which you should avoid using in your business name.
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Use characters for your business name from the approved character set. For example, avoid using umlauts and “greater than” symbol.
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Manually created words, words with an unusual spelling, or a mixture of words go under manual scrutiny.
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The name should also not be offensive to the masses or any organisation.
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It should also not indicate any connection or affiliation with any authorised institution.
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Crosscheck your business name such that it does not have any restricted words, such as ‘Charity’, ‘Incorporated’, Co-operative’, etc.
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Your business name should not be identical to another organisation which is already registered under the Corporations Act 2001.
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The business name which is under review if ASIC processes the cancellation, should also not be used.
Some Dos to follow to finalise a business name for your company.
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The name should be catchy and notable.
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It should also be easy to speak and spell, as well.
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It must be professionally appealing.
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Short and straightforward work best.
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At the same time, it should be descriptive, self-explanatory and peculiar.
If you want to register as a trading name –
Till 28 May 2012, the Australian Business Register (ABR) used to gather names of entities which carried out their business activities. They are called as trading names by the ABR. However, these records are not updated since the inception of the national business name register.
Trading names are different than business names. So, if you want to run your business under a particular name, you need to register the same as a business name.
If you want to register your personal name –
You can even opt to use your personal name for your business – for example, Mary Jane.
And guess what, this option doesn’t need registration. But, if you want to name it as “Mary Jane & Co.” this requires registration since the usage of “Co” does not include in your personal name.
Once you’re done with deciding the business name, you need to determine the model of your business for the process of online company registration.
Choosing a business structure –
A business structure should be chosen based on your requirements. Remember, it is a critical factor in establishing your business though you can change it in future during expansion or restructuring.
Your business structure is essential for:
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Determining the required licenses
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Payment of taxes
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Deciding whether you are an employee or an owner
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Calculating approximate personal liability
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The amount of control on your business
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Analysing costs and volume for your business
There are 4 types of business structures for you to choose from.
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Sole Trader
It is the simplest and affordable form of business structure. This structure makes you liable for all aspects of your business, such as debts, losses, etc.
In this structure, you can use your individual tax file number (TFN) to file tax returns. That means you won’t require a separate bank account for your business. However, we recommend you to have a different one, as it makes it easier for you to keep a record of your business-related expenses and income.
This structure restricts you to share your profits and losses from the business with your family members. If you are a sole trader, then you are liable to pay tax for all the income sources.
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Partnership
It requires 2 or more people to distribute income and losses. There are three types of partnerships.
1. General Partnership (GP): Here, the partners are equally accountable for managing the business with liability for debts and obligations.
2. Limited Partnership (LP): Here, the liability of the partners is limited to the amount of investment made by them for the partnership. These partners are generally passive as they are not involved in managing the daily operations of the business.
3. Incorporated Limited Partnership (ILP): The partners can have limited liability for the debts, but one of them must have unlimited liability. If the business is unable to recover from obligations, then the general partner must take up the liability.
For partnership business structure, you need separate tax file numbers (TFN), and also must have an Australian business number (ABN). Here, you’ll share the control over management with your partners. The income tax is not paid for income earned, rather on the net partnership, each one receives.
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Company
In a company business structure, the company has the same rights as the person. It can be sued, incur debts and can even sue. Here, you are not liable for the debts suffered by the company. In this business structure, you are required to pay the amount for your shares.
Company set up is an expensive and complicated affair, suitable for those who foresee their business income to be variable and who want to keep an option of using losses to balance profits in the future.
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Trust
This is a commitment put on a trustee to have property or assets for the benefit of others, known as beneficiaries. This one too is an expensive process which requires a formal trust deed. Here, the trustee would be expected to manage annual administrative tasks.
After picking your business structure, you need to understand a few processes that come in the way of online business registration.
Things you need to know before you start with the process of online company registration –
First, you need to apply for an ABN Number and start with online business name registration.
This is where Company4Me comes into the picture. With our goal to make everything simple for Australian entrepreneurs, we take care of all your statutory requirements, be it company registration, ABN, or a business name in real-time.
About Australian Business Number –
Without the following, you won’t be able to register your business name.
1. Australian Business Number (ABN), or
2. Already started applying for ABN with the Australian Business Register (ABR).
After this, it is a must to check if the business name that you’ve thought is available. You can check the availability here.
Then, you need to look into ways to protect your business name –
Why?
Online business registration does not mean that you’re done. What if a third party declares a trademark violation?
So, to avoid such cases, you can use IP Australia’s Australian Trade Mark Search to look for already registered trademarks.
ASIC for online company registration –
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You’ll receive an ACN (Australian Company Number).
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That should be done before you get your Australian Business Name (ABN).
The Australian Securities and Investments Commission (ASIC) is a regulator in Australia for corporate, markets, and financial services.
Company4Me can take up the task of online company registration and get it done within a few minutes with the secure submission to ASIC. You’ll receive your documents, including ACN in no time.
With a few details of you and your business (check out here), we’re all set to register your company. Get in touch with us now!
