Register as a Company

You have made the decision to register your business as a Company. Well done.

This page gives you all the steps you need to do to make it happen.

The same advice can be found in Module 2.2 Setting up your Business.

The first step in setting up your Company is to find yourself an accountant.

Your accountant will tell you the best way to set-up your Company from a security and tax efficiency perspective, when you are making decent revenue.

They can also explain Personal Services Income which is the test needed to determine if you can be taxed at the Company rate of 25%.

They will do the hard work for you and your only job is to ask questions at each step to understand the process, and to sign various documents once comfortable.

Note: I believe you can set up your Company yourself but I don't recommend doing it because there are many mandatory steps to follow, and you would still need a lawyer.

Why waste time trying to learn a whole new area when you can pay for a specialist to do it for you and who will be part of your team as the business grows.

Your Next Steps

Your accountant will start the process of setting up your new business including subcontracting in a lawyer.

This process will take several days. At the end of it you will get several documents from your accountant dependent on their process and the state you live in. 

These are the documents I got from my accountant when I set up Next Level Mentoring in WA.

• Constitution of Next Level Mentoring Pty Ltd as a Company Limited by Shares.
• Certificate of Registration including my ACN.
• My Director ID Number
• A bank account opening kit
• A few days later, I got my ABN as the business had been formally registered by the ATO.

At the same time as registering your Company, you may also want to set-up a Trust as it provides lots of benefits. I am being deliberately vague on this as you should speak with your new accountant to understand what a Trust does.

When I set up my Trust, these were the documents I received.

• Discretionary Trust Deed.
• Share Certificate showing the Trust owning the shares in Next Level Mentoring.

Cost and time to set up a Company

Costs

The cost for setting up as a Company is higher than a Sole Trader. The initial set-up costs with ASIC are greater at around $750.

You would also need an accountant to help with setting up the company and all the legal requirements. This can be around $4,000 but depends on your accountant and what they need to do. Your accountant will use their lawyer so you don't need to find a lawyer as well.

A portion of the accountants fees (i.e. $2500) are normally charged after they have completed your tax returns so some of these costs are deferred to later and could also be offset elsewhere dependent on your tax situation.

Time

From starting to find your accountant to getting that all important ABN number, the process will probably take you 2 to 4 weeks. Please factor that in.

What to do while waiting?

There isn't a lot you can do until you have your ABN number as this is essential for the next steps which are:

- Setting up a bank account

- Getting insurance

- Purchasing a ".com.au" website domain. 

I will send you an email every week checking in on the progress of setting up your Company. Once you have your ABN, you can click the button on the email to move the next phase which is setting up your Business Bank Account.