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You will find the Answers
to many Frequently Asked Questions about our comprehensive
range of Company Registration and Compliance services.
For your convenience, please select from the following
categories:
Company Names:
• I
want to choose my own Name for my new Company
- How do I know if it is available?
• Can I choose from a list
of ready named Shelf Companies, and is this a
cheaper alternative?
• I already have a registered
Business Name, which I would like to use for my
new Company. Can I have the same name for both
structures?
• Shelf Company - v - Own
Name Company - what is the difference?
• How do I protect the name
I have registered, so it is distinctive to my
business only?
• Can I change the Name of
my Company in the future?
| Q |
I want
to choose my own Name for my new Company -
How do I know if it is available?
|
| A |
Most people prefer to choose
their own Company Name, appropriate for their
individual needs. When choosing a Name, it
cannot be the same as any existing Company
or any registered Business Name, in any State
of Australia.
ACN DIRECT provides searches online to ASIC's
official Name Index database, to determine
availability prior to all registrations.
If you would like to search a specific name
at no cost and no obligation, please go to
our Company Registration
page or contact the friendly team at ACN DIRECT
on 1800 786 396 or acn@acndirect.com.au
for an instant free response.
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| Q |
Can
I choose from a list of ready named Shelf
Companies, and is this a cheaper alternative?
|
| A |
Yes, we have a list of reserved
Company Names for your convenience. These
Names are reserved only, and have not yet
been allocated an A.C.N. However, there are
additional government fees for Reservation
procedures, and therefore the cost is slightly
more than choosing your own name for your
new Company. To view our current selection
of reserved names, please go to our Company
Registration page or contact the friendly
team at ACN DIRECT on 1800 786 396 or acn@acndirect.com.au
who can provide an up-to-date list of names.
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| Q |
I already
have a registered Business Name, which I would
like to use for my new Company. Can I have
the same name for both structures?
|
| A |
Yes, it is possible to register
your existing Business Name as a Company,
as long as the ownership is the same. Therefore,
the proprietor(s) of the existing Business
Name must also be and remain the shareholder(s)
of the newly formed Company.
However, this is only possible if there are
no other exact Business Names already registered
in any other State of Australia, which would
prevent the Company Name being registered.
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| Q |
Shelf
Company - v - Own Name Company - what is the
difference?
|
| A |
All Companies purchased via
ACN DIRECT are newly created and have no prior
history. They are registered in your directors
and shareholders from the Company's inception,
and have never previously traded or been owned
by any third party subscribers. We act as
the lodging applicant only, and do not have
any involvement in the structure of your company.
The previous requirement to set up companies
in our Name and then transfer to you, is now
outdated and obsolete.
So whether you choose from our list of reserved
Shelf Company Names or choose your Own Name,
there is absolutely no difference in the company
structure.
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| Q |
How
do I protect the name I have registered, so
it is distinctive to my business only?
|
| A |
Once a Company Name is registered
in any State of Australia, that exact name
is protected by law and cannot be used by
anyone else within the Commonwealth of Australia
(either as a company name or as a registered
business name).
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| Q |
Can
I change the Name of my Company in the future?
|
| A |
Yes, subject to the Company's
Constitution and availability of the Name,
the Shareholder(s) of the Company can make
a Special Resolution to change the Name of
the Company, whenever appropriate and as often
as required.
Application must be made to the Australian
Securities Investments Commission (ASIC) within
14 days from the date of Resolution, and statutory
requirements adhered to. ACN DIRECT provides
an all-inclusive service for Company Name
Changes - please view our Company
Compliance page for instruction procedures,
or contact the friendly team at ACN DIRECT
on 1800 786 396 or acn@acndirect.com.au
for further details.
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Constitution / Rules:
• Should
my new Company have a 'Constitution' or adopt
'Replaceable Rules'?
• Articles of Association
- v - Constitution - What is the difference?
| Q |
Should my new Company
have a 'Constitution' or adopt 'Replaceable
Rules'?
|
| A |
A Company may opt to rely on basic rules
of internal management known as 'replaceable
rules', or may adopt a single set of rules
known as a 'Constitution'.
All new companies established via ACN DIRECT
are provided with a clear and concise Constitution,
drafted in conjunction with our legal practitioners
who specialise in corporate and commercial
law and who write extensively for CCH in relation
to company administration.
The adoption of a constitution is widely recommended
due to the following:
| • |
The replaceable rules
are scattered throughout the legislation.
A constitution provides a concise and
chronological sequence of the Company's
own rules. |
| • |
It provides a self contained
published set of rules easily accessible
and conveyable to third parties (eg
banks & financial institutions). |
| • |
It can be
customised and include matters not covered
in the replaceable rules. |
| • |
It can provide varying
rights with regard to issue of shares
and income splitting, eg dividends,
voting and preferences. |
Our Public Company Constitution meets all
the requirements of the ASX Listing Rules,
and has been approved by the relevant ASX
Committee for any company wishing to list
on the Stock Exchange.
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| Q |
Articles of Association
- v - Constitution - What is the difference?
|
| A |
Considerable changes have been implemented
to the Corporations Law since 1998, with the
introduction of the Corporate Law Economic
Reform Program.
Companies no longer have a Memorandum and
Articles of Association.
A company may opt to rely on basic rules of
internal management known as "replaceable
rules", or may adopt a single set of
rules know as a "Constitution".
The memorandum & articles of association
of all existing companies registered prior
to the commencement of the Act on 1 July 1998,
will be taken to be the constitution of that
company.
Those companies cannot benefit from the recent
changes to the Corporations Law, and it is
recommended that existing companies review
and amend their constitutions to conform with
the new legislation.
ACN DIRECT provides a fully comprehensive
service for the adoption of new Constitutions,
please view our Company
Compliance page for instruction procedures,
or contact the friendly team at ACN DIRECT
on 1800 786 396 or acn@acndirect.com.au
for further details.
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Share Classes:
• Can
Shares be Issued at less than $1?
• I want the ability to declare
different amounts of dividends to shareholders
for incoming splitting?
• What Share Classes Can I
Choose from?
| Q |
Can Shares be Issued
at less than $1?
|
| A |
Yes, Shares can be issued at any price the
Directors determine. There is no lower or
upper limit, and Shares can be issued at a
fraction of a cent, if appropriate. ACN DIRECT
will issue Ordinary Class Shares at $1 upon
registration, unless advised otherwise.
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| Q |
I want the ability
to declare different amounts of dividends
to shareholders for incoming splitting?
|
| A |
All Pty Ltd Companies registered via ACN
DIRECT have a concise Constitution which allows
for different classes of shares with varying
rights with regard to issue of shares and
income splitting, eg dividends, voting and
preferences.
Section 160 APE(1) of the Income Tax Assessment
Act now provides:
"A share in the company is taken for
the purposes of this part to be in the same
class as another in the company if the shares
have the same, or substantially the same rights".
Our standard Shares Classes are regularly
reviewed by our legal practitioners to comply
with the ITAA. Each of our Share Classes can
be distinguished separately from one another
in respect of at least 2 rights, that is,
voting and return of capital.
To view a summary of our standard Share Classes,
please go to our Company
Registration page, or contact the friendly
team at ACN DIRECT on 1800 786 396 or acn@acndirect.com.au.
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| Q |
What Share Classes
Can I Choose from?
|
| A |
To view a summary of our standard Share
Classes, please go to our Company
Registration page.
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Company Officeholders:
• How
many Directors / shareholders do I need to set
up a Company?
• What are the duties &
Responsibilities of an Officer of the Company?
| Q |
How many Directors
/ Shareholders do I need to set up a Company?
|
| A |
Pty Ltd Companies (Minimum
1 Director & 1 Shareholder):
Shareholders - Proprietary companies
must have at least 1 shareholder (individual
or company) but are limited to a maximum of
50. There is no requirement for any shareholder(s)
to be a resident of Australia.
Directors - Every proprietary company
must have at least 1 director, whom must ordinarily
reside in Australia. A director must be at
least 18 years of age and there is no upward
age limit. An undischarged bankrupt or a person
subject to disqualification under certain
sections of the Companies Law cannot act as
a director or be involved in the management
or promotion of a limited liability company
in Australia. A Director may, or may not be,
a Shareholder of the company.
Secretary - It is no longer a legal
requirement for a proprietary company to have
a Secretary.
Public Companies (Minimum 3
Directors & 1 Shareholder):
Shareholders - Public companies must
have at least 1 shareholder (individual or
company), and there is no upper limit. There
is no requirement for any shareholder(s) to
be a resident of Australia.
Directors - Every Public company must
have at least 3 directors, two (2) of which
must ordinarily reside in Australia. A director
must be at least 18 years of age and 72 years
is the upward age limit. An undischarged bankrupt
or a person subject to disqualification under
certain sections of the Companies Law cannot
act as a director or be involved in the management
or promotion of a limited liability company
in Australia. A Director may, or may not be,
a Shareholder of the company.
Secretary - Every Public company must
have at least 1 Company Secretary who ordinarily
resides in Australia.
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| Q |
What are the duties
& Responsibilities of an Officer of the
Company?
|
| A |
Directors of companies have duties and
liabilities imposed on them by sec 232 of
the Corporations Law in respect of their role
as officers of the company:
| • |
To act honestly at all times in the
exercise of his or her powers and the
discharge of the duties of his or her
office; |
| • |
To exercise a reasonable degree of
care and diligence in the exercise of
his or her powers and the discharge
of his or her duties (measured by reference
to a reasonable person acting as officer
of the company; |
| • |
Not to make improper use of information
acquired by virtue of his or her position
as an officer of the company to gain,
whether directly or indirectly, an advantage
for himself or herself or for any other
person or to cause detriment to the
company; and |
| • |
Not to make improper use of his or
her position as an officer to gain,
whether directly or indirectly, an advantage
for himself or herself or for any other
person or to cause detriment to the
company. |
It is an offence to contravene the provisions
of sec 232. In addition, the company can recover
monetary damages.
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Common Seals:
• Do
I need a Common Seal for my new Company?
• I have a pre-existing Company
registered prior to 1 July 98 - Does the Company
still require a Common Seal?
| Q |
Do I need a Common
Seal for my new Company?
|
| A |
No, it is no longer mandatory for a company
to have a Common Seal and all Constitutions
provided by ACN Direct since 1 July 1998 contain
an option to execute documents either under
Seal or under hand, for the convenience of
Directors.
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| Q |
I have a pre-existing
Company registered prior to 1 July 98 - Does
the Company still require a Common Seal?
|
| A |
Yes, for companies registered pre 1 July
98, the existing Articles of Association will
be taken to be the constitution of that company.
Unless the existing regulations have been
repealed by the Company and a new regulation
adopted, then a Common Seal remains a legal
requirement.
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Company Liability & Tax Rate:
• What
are the advantages of Trading through a Company?
• What were the recent changes
to the Corporations Law affecting Company Constitutions?
| Q |
What are the advantages
of Trading through a Company?
|
| A |
Liability: In Law a limited liability
company is a separate legal entity, quite
distinct from its shareholders and directors.
The directors and shareholders and the company
therefore have quite separate rights and completely
separate existences. Shareholders' personal
assets cannot be charged to cover liabilities
of the company, unlike that of a sole trader
or partnership.
Taxation: A limited liability company
is liable only for assessment of taxation
on its own profits and any taxation assessed
is payable by the company itself and not personally
by the directors or shareholders. The profits
of a limited liability company are assessed
at a flat rate, which under the New Tax System
will drop to 30 per cent. This is substantially
less than the current highest marginal tax
rate of 48.5 per cent, as per the personal
income tax scale. Directors of course pay
income tax on any personal income tax and
on profits derived from the company.
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| Q |
What were the recent
changes to the Corporations Law affecting
Company Constitutions?
|
| A |
Listed below is a summary of the fundamental
changes made to our standard Proprietary Constitution
in accordance with the two distinct stages
of the government's Corporate Law Economic
Reform Program (CLERP):
The First Corporate Law Simplification
Act [effective 9 December 1995]
| • |
Introduction of single director /
shareholder status for proprietary companies
[affecting appointment/vacancy of directors
and members, meeting requirements, quorums,
execution of documents, etc]. |
| • |
Abolition of the requirement for proprietary
companies to hold annual general meetings. |
| • |
Determination of "small"
and "large" companies. |
| • |
General relief of financial requirements
for small companies. |
The Company Law Review Act 1998 [effective
1 July 1998]
| • |
Memorandum abolished. Articles now
referred to as a "constitution". |
| • |
Use of a Common Seal now optional. |
| • |
Abolition of share par value and consequently
share premium account. |
| • |
Directors may hold telephone and other
electronic meetings to which they all
agree. |
| • |
Members may pass a resolution in writing,
circulating and signing it (except the
removal of an Auditor). |
| • |
Streamlining of the process of appointing
a proxy for representation at meetings. |
| • |
No lower limit on the value at which
a company can issue its shares. |
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