A Step-by-Step Guide to Registering Your Small Business

A Step-by-Step Guide to Registering Your Small Business

Business registration is a legal requirement when starting up a small business for the purpose of carrying out tax obligations. There are several things you must do before jumping on and registering your business; hopefully this list will help you work through those obligations.

• Choose a Business Structure

There are several business structures that you can choose from. In Australia, these structures are:

• Sole trader: gives you full control over your business
• Company: the business is a separate legal entity to you
• Partnership: Made up of two or more people who share income
• Trust: a trustee holds the business for beneficiaries (the trust’s members)
• Co-operative: member-owned business with at least five members.

Choosing the appropriate structure for your vision is a different matter altogether. It requires careful consideration of the advantages and disadvantages of each structure, a task too extensive to put into this short blog post. What matters, however, is that you have a definite business structure before you register your business.

• Choose a Business Name

Seems easy enough, right? What many forget, however, is the rules associated with choosing a business name. It cannot be a personal name alone, cannot already be in use by another business, cannot have any offensive or hateful undertones, cannot include certain words without the permission of a government minister (such as ‘bank’, ‘trust’, ‘royal’ or ‘incorporated’) and must show the liability of its members and status in its name.

• Create Company Rules

There are several options for creating company rules. You can take from the replaceable rules from the Corporations Act 2001, or create a workplace constitution with your own rules. Most will opt for a combination of the two.

• Apply for ABN and GST

An Australian Business Number is an 11-digit code provided by the Australian Taxation Office (ATO). Not all companies will need an ABN, some of the requirements for needing one is if your company’s profits exceeds $75 000 a year and if you are providing goods and services directly to customers. In case you need it to verify your business, you can apply for an ABN through the business registration service.

If your business earns over 75K a year, you will also need to register for GST to access tax credits to reclaim some of the GST paid on purchases.

• Gather all legal documents

These documents include the company’s registered address, employee status, and any necessary licenses or permits for your business activities.

• Register!

You can register your company through the Australian Government Business Registration Service (BRS) that combines business and tax registration in one place. You can also register through a private service provider such as an accountant, a solicitor or another service with ASIC to work through a process tailor-made to your particular business.

If you have further questions or are uncertain about business registration, please contact me. I am here to help.