I meet a lot of people who have great ideas, but are not quite sure of the steps they need to take. This is a very big topic but in this article I want to focus on what you need to start a business in Australia. Specifically, the process of legally formalising a business, such as registering a business name, a domain name, trademark, GST, ABN and so on.
To start a business in Australia, you will need to:
Choose your Legal Business Structure
There are 3 main Legal Structures from which to choose: Sole Trader, Partnership or a Company. There are Trusts and Joint Ventures also but most readers of this article will primarily be concerned with the main three.
Apply for an Australian Business Number (ABN) and/or Australian Company Number (ACN)
Even though it is not compulsory, having an ABN makes it easier for you to do business with others , especially when ordering and invoicing. It helps you avoid PAYG (Pay As You Go) tax on payments you receive and allows you to claim GST credits and obtain an Australian Domain name. Registration is free. For more information, visit the Australian Business Register, https://abr.gov.au/.
If you are a Company, you need an ACN first before an ABN. To apply for an ACN, visit ASIC.
Register your Business Name
Your Business Name is the name under which you will be trading to identify you to your customers, partners and competitors. If you are trading under your, or your partner’s, first name and surname, there is no need to register.
At the time of writing this article, the cost of Business Name Registration Fees and Payment Methods is $34 for one year and $78 for 3 years. To register a business name, visit ASIC: http://www.asic.gov.au/
Register your Trademarks
What might be confusing for most people is that a registered Business Name is not protected. Anyone can use your name. If you want to protect it, you need to register a trademark as well. This protects your business name and stops others from trading it.
Register your website domain name
A Domain Name is a Web Address. It is what you see after the @ of an email address (eg: email@example.com) and after the www of an internet address (eg: www.domainname.com).
It is not legally obligatory to register a Domain Name. However, I recommend you do it early if you are serious about the long-term prospect of your business, and this for the following reasons:
If you do not register your domain name, anyone can register it and use it, especially if it is an international domain like .com, .net or .org. When you finally decide to get a website, you will get to use the domain name of your choice and won’t have to compromise because someone else has registered it.
Secondly, it is more professional to have an email address from your own domain name and a website with its own domain name, rather than a sub-folder of someone else’s web domain name.
At the time of writing, international domain names can be registered from about $15 per year and about $30 for Australian domain names like .com.au for two years.
I cannot recommend a domain name registrar but you can search for a phrase like “domain name register” in Google and you would be met with an extensive list of Search results.
If Oranges and Lime is building and developing your website, we can register your domain name for you with a registrar of our choice.
Register for Tax File Number (TFN)
Every business need a Tax File Number (TFN). Sole Traders can keep their individual TFN. Partnerships and Companies need their own separate TFNs.
Register for Goods and Services Tax (GST)
If you are trading goods and services, register for Goods and Services Tax (GST)
GST is compulsory if your current or expected turnover is greater than $75000, or if you provide taxi travel services as part of your business.
Register for Pay-As-You-Go (PAYG)
If you are paying employees, directors or businesses that do not quote their ABN to you, you need to register for PAYG before you can withhold that amount.
If your staff is paid above particular threshols set by each state or territory you operate under, have a look if this is relevant for you.
- ACT Revenue Office
- NSW Office of State Revenue
- NT Revenue
- QLD Office of State Revenue
- SA Revenue
- TAS State Revenue Office
- VIC State Revenue Office
- WA Office of State Revenue
Fringe Benefits Tax (FBT)
Look into this if you are providing your employees company cars, car parking discounts, low interest loans, Christmas parties and if you intend on paying for Private expenses.
There is also Fuel Tax Credits, Wine Equalisation Tax and Luxury Tax. Check the ATO website to find out more.
This article is written for the Australian context and it may not touch on all possible businesses and business types, but I hope I’ve provided a quick reference here to lead you in the right direction. If you are from another country, and you are professionally familiar with the alternatives, write it up and send us the article to be considered for publication.
I will try to update this resource as often as I can to keep it accurate and timely. If it is outdated, needs correction or addition, feel free to post the details in the comment field below to help us maintain a good resource here for business owners.