How many shares can be issued and what are the different classes of shares?
A company must not have more than 50 non-employee shareholders.There is no restriction on the number of shares that may be issued. However, it may be a good idea to issue 12 shares when the company is registered. This usually makes it easier to transfer shares to new or existing shareholders without having to continually alter the company's share capital. You should seek advice regarding this before deciding on the number of shares in the initial share capital for your company.
How many directors must a company have?
The company must have at least one director.
Do all the directors have to reside in Australia?
At least one director must ordinarily reside in Australia.
Do prospective directors have to do anything?
Directors must provide their written consent to act as director before the company is registered (and before being appointed a director). ABNAustralia.com.au provides a personalised consent form for each director as part of its Company Registration package.
How old must a company director be?
At least 18 years of age.
What are the directors' substantive duties under the Corporations Act?
Directors are subject to a number of substantive duties under the Corporations Act (as well as generally at law). The Corporations Act sets out a number of the more important duties of directors, including:
- to act in good faith;
- to not improperly use their position;
- to not improperly use information that they have obtained by virtue of being an officer of the company;
- to act in the best interests of the company;
- to avoid conflicts between the interests of the company and the director's interests;
- to act honestly;
- to exercise care and diligence;
- to prevent the company trading while it is unable to pay its debts; and
- if the company is being wound-up, to report to the liquidator on the affairs of the company and to help the liquidator (by, for example, giving to a liquidator any records of the company that the director has).
What are the consequences if a director fails in these duties?
The Corporations Act states that a director who fails to perform their substantive duties:
- may be guilty of a criminal offence with a penalty of 2,000 penalty units or imprisonmentÂ for up to 5 years, or both; and
- may contravene a civil penalty provision (and the Court may order the person to pay to the Commonwealth an amount of up to $200,000).
Do I need a company secretary?
No. The Company is not required to have a company secretary. However, if the company will have only one director, then having a secretary may make it easier for the company to sign documents in a way that is acceptable to the banks.
How many company secretaries can I have?
There is no limit to the number of company secretaries a company may have. But it makes sense to only have one.
Do the company secretaries have to reside in Australia?
If the company has:
- one company secretary, then he or she must ordinarily reside in Australia; or
- more than one secretary, then at least one of them must ordinarily reside in Australia.
Do prospective secretaries need to do anything?
The person consenting to being appointed as company secretary must provide the company with a signed consent to act as secretary of the company before being appointed. ABNAustralia.com.au provides a personalised consent form for each secretary as part of its Company Registration package.
What are the secretary's administrative duties under the Corporations Act?
The company secretary has a number of administrative obligations under the Corporations Act, including the responsibility for ensuring that the company:
- notifies ASIC about changes to the identities, names and addresses of the company's directors and company secretaries;
- notifies ASIC about changes to the register of members;
- notifies ASIC about changes to any ultimate holding company; and
- responds, if necessary, to an extract of particulars or any return of particulars that it receives.
Do I need a public officer?
Yes. Each company must have a public officer. More information about Public Officer can be found on the ATO website here.
How many public officers can I have?
Does the public officer have to reside in Australia?
What is the process?
A public officer must be appointed within three months of the entity commencing business or deriving income in Australia. The notification of appointment must include the public officer's name and a contact address. For more information on how to notify the ATO of who the public officer is, please visit their website here.
What are the consequences if the company does not have a public officer?
For every day that the company does not have a public officer it will be fined one penalty unit ($110).
What are the public officer's obligations?
The public officer is answerable for the doing of all things as are required to be done by the company under the Income Tax Assessment Act 1936 or the regulations.
What are the consequences if the company is in default?
If the company is in default of these obligations, then the public officer is liable to the same penalties as the company.
- Frequently Asked Questions
- Checklist for Registering a Company
- Company Name Availability
- How to Protect Your Company Name (trademarks)
- Special Purpose Companies
- Charitable organisations
- Pre-registration: Reserving a company name
- Pre-registration: Thinking about the Structure
- Registering the Company
- Post-registration: Notifying ASIC of changes to the Company