A startup company is a legal entity or business in the initial stages. It is a young business founded by one or more members to deliver a unique product or service. Most startups get their initial funding from their founders’ own savings. However, it is increasingly attracting valuable investors because of its innovative approaches and solutions to market needs.

If you’re a founder or a startup member, you should register it as an official company. Nowadays, it is easy to register a company. You can even do it online. That’s why it’s time to bring your novel ideas to the market!

When Should you Transition to a Company?

You may wonder at what point of the startup process you should apply for legalities. Like any other business venture, startups are subject to rules and regulations. It is best to do it quickly for personal protection purposes. A company is a separate entity, so you reduce your liability. Other signs you should start incorporating are the following:

  • Your startup has two or more founders
  • You are raising funds to go to the startup and not for you personally
  • You start hiring consultants or employees

Register your Startup

As mentioned, the earlier you register, the better. Once you decide to register your startup, you should consider the following requirements:

Choose a name

A company name and a business name are two separate things. A company name is the official name of your business. It is disclosed in business letters, official publications, cheques, license applications, endorsements, invoices, and credits. It is protected by law and cannot be used by others. You can only have one registered company name, while you can have several trading names.

The trading name, also a business name, is used for carrying out business and marketing purposes. Unlike company names, it is not protected by law. So if a limited company decided on the same name, they could acquire it. However, you can apply for a trademark to safeguard your brand. For your business name, think of an original, easy-to-remember name that encapsulates your brand’s image.

Businesses in the country are regulated by the Australian Securities and Investments Commission (ASIC). You should check with ASIC if your business name is available. They also approve naming conventions like “bank” or “trust” if you are in that industry.

Team and Structure

The most common business structures are sole proprietorship, partnership, and limited liability company (LLC) for startups. A sole proprietorship means one individual is liable to the business. For partnerships, there is a formal agreement between partners to avoid confusion in responsibilities. An LLC is a more formalized structure that offers liability protection to its shareholders.

Many startups usually favour LLC. However, it is possible to convert business structures down the road. So you can study about it in the process.

Registration Requirements

To register a company, you need to secure permits and licenses applicable to your business type. Your location can also require specific permits. These legal documents may vary, but there are four key requirements.

  • The Australian Business Number (ABN) is a unique 11 digit number to identify your startup during the ordering and invoicing.
  • When your revenue exceeds $75000, you must register for the Goods and Service Tax (GST). After GST registration, you must submit quarterly Business Activity Statements (BAS).
  • The Tax File Number (TFN) is needed for anyone working in Australia. This number is used to file tax returns with the Australian government every year.
  • The Pay As You Go (PAYG) allows instalments for tax obligations over the year.

After registration, you can work on domain names, trademarks and go full-force in your marketing. It would help if you also learn about attracting investors, research competition, and provide good customer service. If you ever feel overwhelmed, remember Microsoft, McDonald’s, and Ford Motors were startups too. Who knows, your startup can be the next big thing.