Company Secretarial

What is a member’s resolution?

A member’s resolution is the formal way that decisions made in members meetings are noted and then filed in the company’s register.

There are two types of member’s resolution, as some decisions require more of a majority in the members than others to pass. Ordinary resolutions require only a 50% majority in order to pass the decision they are noting. Special resolutions are needed in instances such as changing the company’s name, winding up the company and changing your company type. Special resolutions require at least 75% of the vote cast to be in favour of the decisions being made.

How do you change a company name?

An existing company can change its name by passing a special resolution and lodging a Form 205 Notification of resolution with ASIC. The Form 205 will need to contain details of the company’s special resolution with the proposed new company name.

In order to change the name of your company, you will need to choose a name that is available, pass a special resolution, and lodge the Form 205 with ASIC. Patricia Holdings can prepare the necessary Form and resolutions for you and lodge the Form 205 with ASIC electronically.

How do you deregister a company?

If you no longer require your company, you can apply to voluntarily deregister it with ASIC by lodging a Form 6010. Deregistering a company will mean that it no longer exists as a legal entity and the ongoing obligations of company officeholders will cease.

Before you can apply to deregister your company, you must ensure that:

  • All members of the company agree to the deregistration;
  • The company is not carrying on business;
  • The company's assets are worth less than $1,000;
  • The company has paid all fees and penalties payable under the act;
  • The company has no outstanding liabilities; and
  • The company is not a party to any legal proceedings.

Patricia Holdings can prepare and lodge the Form 6010 on your behalf. We will prepare all documentation the day the order is received and lodge the Form 6010 electronically with ASIC as soon as a signed copy has been returned to us. We will also provide you with Directors and Members resolutions.

ASIC will then notify Patricia Holdings when they have approved the application (usually about 2 weeks), which we will scan and email to you immediately. The application to deregister the company will then be published in the ASIC Gazette for a period of 2 months. Following this, ASIC will deregister the Company.

Can I reserve a company name?

A company name can be reserved for you for a period of two months should you wish to secure the name but do not yet have all the details required to incorporate the company. Simply place an order with us and we will prepare and lodge the Form 410 electronically to quickly reserve the company name with minimal delay.  This reservation can be withdrawn at any time if required.

Does my company need a constitution?

A constitution sets out the rules by which a company is governed and may be adopted before or after registration of the company. If a company chooses not to adopt a constitution the default set of rules in the Corporations Act 2001 known as the replaceable rules will apply.

Generally, a company will be free to operate under the replaceable rules; however these rules are not applicable to a proprietary company where the same individual is both the sole director as well as the sole shareholder.

Similarly, if the company is to qualify as a special purpose (Home unit, Not-for-profit or Superannuation trustee) company in order to attract a reduced annual fee, it will need to be governed by a constitution which contains clauses specific to each type of company. A Not-for-profit company may also require specific clauses in order to qualify for tax concessions with the ATO.

Patricia Holdings has constitutions that are suitable for each of the above purposes.

Can I convert from a public company to a proprietary company?

A public company can convert to a proprietary company by passing a special resolution of the shareholders so long as the conversion between the two company types are allowed under section 162 of the Corporations Act 2001 (Cth). For the two most common types of public company, section 162 states that:

 A public company limited by shares may convert to:

  • An unlimited public company;
  • An unlimited proprietary company;
  • A proprietary company limited by shares; or
  • A no liability company.

A company limited by guarantee may convert to:

  • A public company limited by shares;
  • An unlimited public company;
  • A proprietary company limited by shares; or
  • An unlimited proprietary company.

An unlimited public company may convert to:

  • Public company limited by shares
  • Proprietary company limited by shares
  • Unlimited proprietary company

A public no liability company may convert to:

  • Public company limited by shares
  • Proprietary company limited by shares

In order to convert to a proprietary company, the requirements for proprietary companies set out in section 113 of the Corporations Act must also be met; one of these being that the company must not have more than 50 shareholders.

 In order to complete the conversion a special resolution must be passed; the appropriate Forms and documents must be lodged with ASIC and the relevant fee must be paid. The documents to be lodged are:

  • A Form 205 - Notification of resolution;
  • A Form 206 Application for change of company type; and
  • A copy of the new company constitution.

Can I convert from a proprietary company to a public company?

A proprietary limited company can convert to a public company by passing a special resolution of the shareholders so long as the conversion between the two company types are allowed under section 162 of the Corporations Act 2001. Section 162 states that:

A proprietary company limited by shares may convert to:

  • An unlimited proprietary company;
  • An unlimited public company; or
  • A public company limited by shares.

An unlimited proprietary company may convert to:

  • Proprietary company limited by shares
  • Public company limited by shares
  • Unlimited public company

 In order to complete the conversion a special resolution must be passed; the appropriate Forms and documents must be lodged with ASIC and the relevant fee must be paid. The documents to be lodged are:

  • A Form 205 - Notification of resolution;
  • A Form 206 Application for change of company type; and
  • A copy of the new company constitution.

How do I add a Director to my company?

Notifying ASIC of changes to the details of a company, such as the appointment of a director, is done using a Form 484 ‘Changes to Company Details’, which is lodged online. The exact procedure that a company must follow to appoint or resign a director will depend on their governing documents (constitution or replaceable rules).

Before lodging the Form to add a director, they must provide written consent to taking on the roles and responsibilities of being a director. They must be 18 years of age and not have otherwise been disqualified from being a director.

A director must provide ASIC with their:

  1. Full legal name (and any former names);
  2. Residential address;
  3. Date of birth; and
  4. Place of birth.

Patricia Holdings provide you with the required minutes or resolution and consent to act as the preparation and lodgement of the Form 484 with ASIC, leaving you with nothing more to do. Simply place your order for ‘Standard ASIC Company Changes’ as part of our company secretarial service.

How do I remove a Director from my company?

Notifying ASIC of changes to the details of a company, such as the removal of a director, is done using a Form 484 ‘Changes to Company Details’ which is lodged online. The exact procedure that must be followed where a director is resigning from a proprietary company will depend on its governing documents (constitution or replaceable rules).

Before lodging the Form to remove a director, you should ensure that the minimum officeholder requirements for that particular company type will continue to be met. A proprietary company must have at least one director who resides in Australia, and a public company must have at least 3 directors with at least two residing in Australia.

Patricia Holdings provide you with the required minutes or resolution, notification of resignation as well as the preparation and lodgement of the Form 484 with ASIC, leaving you with nothing more to do. Simply place your order for ‘Standard ASIC Company Changes’ as part of our company secretarial service.

What happens if I am late to lodge a Form with ASIC?

Most documents or Forms need to be lodged with ASIC within a certain timeframe which can vary depending on the type of Form (usually 14 or 28 days). If a document is lodged outside of the required timeframe then late fees can apply.

Late fees as at 1 July 2020 are:

  • one month $82
  • over one month $340

Can I issue shares in my company?

A company can issue new shares to a new or existing shareholder after the company has been registered. Section 254X in the Corporations Act 2001 (Cth) states that a company must notify ASIC of a share issue within 28 days in the prescribed form which sets out:

  • The number of shares that were issued;
  • The class to which each share belongs;
  • The amount agreed to be paid;
  • The amount unpaid (if any) on each of those shares; and
  • If the shares are issued for non-cash consideration under a contract, the company must also lodge a Form 207Z - Certification of compliance with stamp duty law which certifies that all state and territory stamp duty associated with the contract has been paid. Additionally, if the company is a public company, either a Form 208 or a copy of the written contact must be lodged.

In order to notify ASIC of a share issue, a company will need to lodge a Form 484 – changes to company details which will contain all of the required information above (excluding the additional forms). Patricia Holdings can assist with preparation and lodgement of the Form 484 as well as the relevant minutes/resolutions. Simply place your order for ‘Standard ASIC Company Changes’ as part of our company secretarial service. This Form should be lodged within 28 days of the changes taking effect to avoid late fees.

Can I transfer the shares in my company?

A shareholder of a company is able to sell their shares to another party. The process that needs to be followed in order to transfer shares will depend on the company’s constitution (or replaceable rules) and the terms of any shareholders agreement that may be in place. This will generally involve offering the shares to existing shareholders before offering them to third parties.

Once the seller has found a buyer using the procedures set out in the company’s governing documents, the buyer will need to consent to becoming a member of the company and being bound by the rules of the constitution. Then, once a formal agreement has been entered into, ASIC will need to be notified of the changes to the shareholder details.

In order to notify ASIC of the share transfer, the company will need to lodge a Form 484 – changes to company details which will contain:

  • The name and address of the seller;
  • The name and address of the purchaser;
  • The class of shares being transferred;
  • The amount being paid per share; and
  • Whether the shares will be beneficially held.

Patricia Holdings can assist with preparation and lodgement of the Form 484 as well as the relevant minutes/resolutions. Simply place your order for ‘Standard ASIC Company Changes’ as part of our company secretarial service. This form should be lodged within 28 days of the changes taking effect to avoid late fees.

Can I replace my company constitution?

Yes, a company can amend, replace or repeal an existing constitution. Generally this is achieved by passing a special resolution; however an alternative process may be set out in the company’s original constitution.

A special resolution is passed where at least 75% of voting members vote in favour of the resolution at a general meeting. In order to hold a general meeting and vote on a special resolution, a company must give sufficient notice.

At least 28 days’ notice for publicly listed companies and 21 days’ notice for other company types must be given unless members with at least 95% of the votes that may be cast at the meeting agree beforehand to vote on shorter notice pursuant to s249H(2) of the Corporations Act 2001.

If the company amending or replacing its constitution is a public company then, pursuant to s136 of the Corporations Act 2001, it will also need to lodge with ASIC:

  • A Form 205J which notifies them that a resolution to change the company’s constitution has been passed; and
  • A copy of the new constitution that has been adopted; or
  • A copy of the modification that has been made to the constitution.

Can I convert shares from one class to another?

Subject to the governing documents, a company may convert shares from one class of shares to another. Section 246F(1)(b) of the Corporations Act 2001 states that a company must lodge notice in the prescribed form following “a conversion of shares in a class of shares in the company into shares in another class.”

In order to notify ASIC of this change, a Form 211 Notification of division or conversion of classes of shares will need to be lodged. In order to avoid late fees, this form will need to be lodged within 14 days of the date of the conversion and cannot be lodged online. 

Can I cancel shares in my company?

A company can reduce its share capital in a number of ways under the Corporations Act 2001 – The two most common methods are:

  • A share capital reduction; or
  • A share buy-back.

The Corporations Act limits a company’s ability to reduce its share capital prior to the company being wound up. The main reason for this is to protect the interests of creditors who are faced with the principle of limited liability should the company become insolvent, but also acts to protect the interests of and ensure fairness between shareholders.

A share buy-back differs from a share capital reduction in that shareholders are not obliged to accept the company’s offer for a share buy-back. By contrast a share capital reduction can affect shareholders who voted against the decision.

A SHARE CAPITAL REDUCTION involves returning the money (although not always) that was originally paid by a shareholder to acquire shares, to that shareholder, while cancelling those shares.

Section256B of the Corporations Act 2001 states that a company may only reduce its share capital if the reduction:

  • is fair and reasonable to the company's shareholders as a whole; and
  • does not materially prejudice the company's ability to pay its creditors (although this is not relevant if the shares are cancelled for no consideration); and
  • is approved by shareholders under section 256C.

A share capital reduction can be either:

  • An equal reduction which may be passed by a simple majority, unless stated otherwise in the company’s constitution. This type of share capital reduction is one
    • which relates only to ordinary shares;
    • applies to each holder of ordinary shares in proportion to the number of ordinary shares they hold; and
    • the terms of reduction are the same for each holder of ordinary shares; or
  • A selective reduction which must be approved by either;
    • a special resolution with no votes being cast in favour of the resolution by any person who is to receive consideration as part of the reduction or whose liability to pay amounts unpaid on shares is to be reduced, or by their associates; or
  • a resolution agreed to by all ordinary members.


Further, if the reduction involves the cancellation of shares, the reduction must also be approved by a special resolution passed at a separate meeting of the members whose shares are to be cancelled.

This type of share capital reduction is one which relates to any other reduction where the criteria for an equal reduction are not met.

In either case, a Form 2560 Notification of reduction in share capital details must be lodged with ASIC along with notice of the meeting at which it is proposed to pass the resolution to reduce the share capital and any document relating to the reduction that will accompany the notice of the meeting sent to members. Notice must be no less than 29 days before the meeting for Public companies and 22 days for any other company. A single member is not required to give notice of a meeting, however will still be required to lodge a Form 2205 once the resolution is passed.

Once the decision has been made to reduce share capital, a Form 484 Change to company details must then be lodged with ASIC notifying them of the changes.

A SHARE BUY-BACK involves a company offering to purchase some or all of the shares of a shareholder. There are a number of different categories of share buy-back, the most common of which for non-listed companies are equal access and selective.

 

Section 257A states that a company may buy back its own shares if:

  • the buy-back does not materially prejudice the company's ability to pay its creditors; and
  • the company follows the procedures laid down in this Division – being Division 2 of Part 2J.1 of the Corporations Act.

An all access buy back is the simplest form of buy back and involves all ordinary shareholders receiving an identical offer to sell the same percentage of their shareholding back to the company. Different rules also apply between share buy-backs involving 10% or less of the total shares to be purchased within a twelve-month period, and share buy-backs involving over 10% (the 10/12 limit).

If the buyback is within the 10/12 limit then shareholder approval is not required, however, if a proposed share buy-back is over the 10/12 limit then it can only take place following passage of an ordinary resolution. Once these requirements have been complied with, and the share buy-back has been carried out, the company will need to notify ASIC of the change in share structure by lodging a Form 484.

A selective buyback occurs where identical offers are not made to every shareholder, for example where offers are only made to some members of the company. This type of buyback must either be:

  • approved by all shareholders, or
  • by a special resolution (requiring a 75% majority) of the members in which no vote is cast by selling shareholders or their associates. Selling shareholders may not vote in favour of a special resolution to approve a selective buy-back.

The 10/12 limit does not apply to this type of buy-back.

Where shareholder approval for a buy-back is required, a Form 280 Notification of share buy-back details must be lodged with ASIC before the notice of meeting and associated documentation is sent to shareholders. If the company wants to enter into the buy-back agreement within 14 days of lodging the Form 280, than it will also have to lodge a Form 281 Notice of intention to carry out a share buy-back.

Once these requirements have been complied with, and the share buy-back has been carried out, the company will need to notify ASIC of the change in share structure by lodging a Form 484.

What happens if the Director of a Company dies?

What happens if the Director of a Company dies depends on the number of Company Directors and if a will has been made or not. For companies with more than one Director, the surviving Directors can continue to manage the Company without much issue and notifying ASIC is a fairly straight forward process. ASIC can be notified of the death of the Director using a Form 484. A Form 484 is used to notify ASIC of the details of any changes made to a Company. If a new Director is being appointed, this change can be made using the same Form 484. Patricia Holdings can lodge this Form on your behalf and prepare the necessary resolutions for $100+gst.

For Sole Director Companies however, the process is a bit more complicated – especially where the Sole Director is also the Sole Shareholder.

For those that have organised a will, section 201F of the Corporations Act 2001 provides that in the event of the death of a single Member/Director a Pty Ltd company, the executor or other personal representative appointed to administer the deceased’s estate may appoint a new Director to the company. This section also provides that this newly appointed Director has all the powers, rights and duties of the deceased Director and can keep the Company running until shares are transferred out to beneficiaries who may then appoint new Directors if they wish.

Once an executor or administrator has been appointed, ASIC should be notified via a Form 484. ASIC would also need to be notified if/when a replacement Director is appointed.

If the Sole Director of a Company dies without leaving a will, the death will usually leave the Company without any person properly authorised to immediately manage the Company.

Does a sole director and sole shareholder of a company need a will?

It’s advisable for everyone to have a will. If you’re a sole director and sole shareholder of a company, according to ASIC, you should have a will. It’s recommended that within the will you make provision for who is the beneficiary or beneficiaries of your shares if the sole director/shareholder dies.

If you are a sole director and sole shareholder of a company and do not have a will outlining what happens in the event of your death, it’s possible that a close relative or other such person would have to apply to the Supreme Court for letters of administration to manage the estate and this could take some time - possibly weeks, if not months.

Alternatively, in the absence of any immediate relatives or other obvious people to deal with the estate, a Public Trustee may step in and administer the deceased estate, but this process can also take months. During that period when there is no director, the company may be unable to operate and with no-one properly authorised to make management decisions or act for the company, it may be unable to trade.

Banks and other financial institutions in particular may be unwilling to accept instructions in relation to a company’s trading account if they are not satisfied there is someone properly authorised to act for it. This may result in staff and suppliers unable to be paid, which can quickly have a harmful effect on the reputation and value of the company. 

MYOB / QuickBooks

How does this export functionality work?

The export functionality from the Patricia Holdings website will enable you to export details from your Patricia Holdings online account into a CSV file which can then be directly imported into your MYOB or QuickBooks accounts as a new contact record.

How do I select records to export?

On the left hand side of the Orders and Invoices webpage, click on the link “Company Data” to access the records that are ready to be exported.

To export a record you can do one of the following:

  1. Click on the company name. Click on the “Transfer Data” drop down and select “Export to MYOB” or “Export to QuickBooks”. A message confirming a successful export will be shown at the top of the screen.
  2. You will see a file download appear – depending on your browser, your file will automatically be saved to the downloads folder or you will be able to define the location for it to be saved.


Alternatively

  1. Select the tick box next to the Company name, click on the “Transfer Data” drop down and select “Export to MYOB” or “Export to QuickBooks” . A message confirming a successful export will be shown at the top of the screen.
  2. You will see a file download appear – depending on your browser, your file will automatically be saved to the download folder or you will be able to define the location for it to be saved.

Can I export multiple records at one time?

Yes you can! Using the tick boxes next to each company name, select the number of records you want to export. Click on the “Transfer Data” drop down and select “Export to MYOB”. A message confirming the successful export will be shown at the top of the screen.

What details will be exported?

The following Company registration details will be exported:

  • Company name
  • Company address
  • Director name
  • Additional Director and/or member names – up to a maximum of 5 as limited by the accounting software

Where can I find the information once it has been exported?

This is dependent on the web browser you are using. Either the exported data will be placed in your downloads folder on your machine or as part of the export process, you will be asked to define the location where the file should be saved.

How do I then get this data into MYOB or QuickBooks?

Simply follow the normal import steps for either software. The file can be directly imported into the accounting software to create new customer records.

For further instruction on how to import the csv file into MYOB and QuickBooks please refer to the help section for each software.

ABN

What is an ABN?

An Australian Business Number (ABN) is a unique 11 digit number that identifies your business to the government and community. The ABN is provided by the Australian Business Register (ABR).

The ABN does not replace the tax file number.

Is the ABN the same as an ACN?

No. The Australian Company Number (ACN) is a nine-digit number issued by the Australian Securities and Investments Commission (ASIC). It is a unique identifier purely for companies, unlike an ABN which is issued to all entities conducting a business.

What are the benefits of having an ABN?

There are multiple benefits to having an ABN. For example:

  • Payment – if included on your invoices, your clients will not be required to deduct PAYG withholding tax of 47%.
  • Authority – it provides clients with the confirmation that yours is an established business
  • GST Registration – if you want or need to register for GST then an ABN is required.
  • Banking – you will need an ABN to open a business bank account

How do I apply for an ABN?

Patricia Holdings can assist you with applying for an ABN. Simply complete our online form, providing all the necessary details and we will handle the rest!

When you order your company or trust from us and also want an ABN or TFN, our online system auto-completes the application with information from your company or trust to save you time re-typing the same information. You can even use our online system to apply for an ABN or TFN if you didn’t order your company or trust from us. Most importantly, an experienced Patricia Holdings staff member will review your application prior to its final submission to the Australian Taxation Office, ensuring any problems with your application are identified early on saving you time and money correcting them later.

$176 (inc GST)

How long does it take to get an ABN?

Provided you have given us all of the relevant information and the ABR has not flagged any information as needing review, Patricia Holdings are able to have your ABN to you immediately after lodging the application.

If information is missing or the ABR is not able to verify it, there will be a delay as your application will be processed manually which can take up to 28 days.

Only when an ABN has been issued by the ABR will the public details about the ABN become available on the ABN Lookup.

How can I track the progress of my ABN application?

If your ABN is deemed as requiring a manual review, the ABR will be in touch with you within 28 days. However we advise contacting the ABR directly to follow up with your application.

We are not allowed to contact the ABR on your behalf to follow up on a lodged application - only authorised contacts and associate individuals of the entity can.

Can I use an existing ABN for my new company?

No. The ABN is a unique identifier for every business. The new company must register for a new ABN.

Can I use the same ABN for more than one business?

Yes you can conduct any number of activities/businesses under the same ABN provided that they are all operating under the same business structure.

If your second or subsequent businesses operate under a different structure, you will need to apply for separate ABNs for each new business structure.

Do I get my ABN at the same time as my ACN?

Unfortunately no, our system is not currently integrated to run both applications concurrently. To get an ACN, our system needs to speak with ASIC, whereas to get an ABN, we have to apply to the ABR, a separate government entity.

Do I need to provide the TFN’s of the individuals involved in the company that I am trying to register an ABN for?

Providing the Tax File Numbers (TFNs) for associate individuals and/or organisations of the company currently applying for an ABN is a way to expedite the process, however the ABR does not require the TFN’s to validate a person’s identity. In some circumstances, their address will suffice if it is the same address currently listed on their TFN documents. In our experience however, if an associate individual or organisation does not provide their TFN, or their details  don’t match TFN documents, we have found that an ABN will either be refused at the time of submitting the application or the company can face delays in obtaining their ABN - sometimes up to 28 days. It is for this reason, while it is not mandatory, we do strongly suggest providing the TFNs.

What happens if an associated individual or organisation is a foreign person or entity?

For ABN applications that include associated foreign persons or organisations, there can be significant delays from the ABR's end in obtaining the ABN.

The only way to verify a foreign person’s identity is to have copies of their identification documents certified by a Notary Public of their country of residence posted to the ABR - they cannot be scanned and emailed. The certification must be pen to paper. To certify a foreign organisation, the ABR requires their country's equivalent of ASIC's Certificate of Incorporation posted to them. Along with these documents, the company applying for the ABN will also need to include a statement of business activities that the ABR can review.

Once this package is received by the ABR, they will be able to verify the foreign entities identity and as such, provide the ABN.

What information will you need from me?

We will need information regarding:

ABN/TFN Registration:

  • Details of the entity including name and contact details
  • The business’ general activities
  • Authorised contact details (these are the individuals who are permitted to liaise with the ATO on behalf of the entity)
  • Associate details (these are the individuals and organisations who play a role in the entity)
    • Associate Individuals
      - Legal name
      - Date of birth
      - Position(s)
      - TFN or residential address
    • Associate Organisations:
      - Legal name
      - ACN, ARBN or ABN if applicable
      - TFN or address and date of incorporation

GST Registration:

  • Estimated annual sales turnover
  • Desired GST reporting period (monthly, quarterly or annually)
    NB not all options are available to all entities.

PAYG Registration:

  • Estimated number of employees (including directors receiving a salary)
  • Estimated amount of income tax to be withheld

When do I need to register for a TFN?

Any entity that plans to make an income will need to register for a TFN. If you are unsure, we suggest seeking professional legal or financial advice prior to lodging your application.

What is a TFN?

A tax file number (TFN) is a unique identifier issued by the Australian Taxation Office (ATO) to each taxpaying entity – individuals, companies, SMSFs, partnerships and trusts. TFNs were initially introduced to facilitate file tracking at the ATO but have since been expanded to encompass income and other data matching. They are a 9 digit number and may only be recorded or used specifically for authorised tax-related purposes.

What does it mean if the Company intends to account for GST on a cash basis?

There are two methods of accounting for GST – cash and accrual.

Accounting for GST on a cash basis means you account for GST in the period that you receive the money or make the payment. You can only use the cash accounting method if you are a small business entity earning an aggregated turnover of less than $10 million, are not carrying on a business but your turnover is $2 million or less, account for income tax on a cash basis and/or you run a kind of enterprise that the ATO has agreed can account for GST on a cash basis regardless of turnover.

The alternative accounting method, accrual accounting, means that you account for GST during the period that you issued the invoice or were billed, regardless of whether payment has been received or made.

When do I need to register for GST?

If your entity’s turnover is $75,000 or greater per year (or $150,000 for non-profit organisations), or you provide taxi travel including ride-sourcing, you will need to register for GST.

If you earn less than the GST threshold, you may also apply voluntarily. Many business’ do this to take advantage of the GST credits available.

What is GST?

Goods and Services Tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. Entities registered for GST will include GST in the price they charge which is to be remitted to the ATO on a periodic basis, and claim credits from the ATO for the GST they have paid for goods and services they buy.

When do I need to register for PAYG?

If your entity plans to pay salaries and wages (including to Directors), you will need to register for PAYG.

What is PAYG?

Employers have a role to play in helping their employees meet their end of year tax liabilities. This is done by collecting Pay As You Go (PAYG) withholding amounts from payments in the form of salaries and wages. The withheld amounts are remitted by the employer directly to the ATO.

Xero

How does this integration work?

The integration with the Patricia Holdings website will enable you to export details from your Patricia Holdings website account into Xero as a new contact record under a selected Organisation.

How do I connect to Xero?

Log into your Patricia Holdings account, click on “Orders and Invoices” to access all of your finalised orders. On the left hand side of the screen you will see the blue “Connect to Xero” button. Click on this button to connect to Xero. You will be presented with your Xero login screen. You can select which organisation record within Xero you would like to import the details to.

A message will be shown at the top of the screen to confirm that you are connected to Xero and which organisation you are connected to.

How do I know which organisation I am connected to in Xero?

You will be able to see the Organisation name at the top of screen.

How do I disconnect from Xero?

You will be able to disconnect from Xero by clicking on the “Disconnect from Xero” link on the left hand side menu bar on the Orders and Invoices web page.

How do I select records to import into Xero?

On the left hand side of the Orders and Invoices webpage, click on the link “Company Data” to access the records that are ready to be uploaded into Xero, i.e. those that have been processed by ASIC.

To upload a record into Xero you can do one of the following:

  1. Click on the company name. Click on the “Transfer Data” drop down and select “Add to Xero Contacts”. A message confirming a successful import will be shown at the top of the screen.
  2. Select the tick box next to the Company name, click on the “Transfer Data” drop down and select “Add to Xero Contacts”. A message confirming a successful import will be shown at the top of the screen.

Can I import multiple records at one time?

Yes you can! Using the tick boxes next to each company name, select the number of records you want to import. Click on the “Transfer Data” drop down and select “Add to Xero Contacts”. A message confirming the successful import will be shown at the top of the screen.

What details will be imported into Xero?

The following Company registration details will be imported into the new Xero contact record:

  • Company name
  • Company address
  • Director name
  • Additional Director and/or member names – up to a maximum of 5 as limited by the Xero Contact record

Where can I find the information once it has been imported?

Open Xero and head to your contact list for the applicable organisation to which you have imported the records. You will see the additional contacts added to this list. Enter into the new contact record to see the imported data.

Will the company number (the ACN) be imported?

Unfortunately Xero do not allow integrations to import the company number into their contact records in Xero. We have raised this with them but at this point of time it is not possible.

Business Names

Where do I find the ASIC Electronic Lodgement Protocol (ELP)?

Can Patricia Holdings register a business name for me on my behalf?

Yes. You can register a business name with Patricia Holdings online here, or by downloading and completing a paper form available here.

You do not need to have set this entity up with Patricia Holdings initially.

Once we receive your order form we will apply for your business name on your behalf. Assuming the name is available; in most cases we are able to confirm the registration of your name on the same day and often in as little as an hour.

For prices, click here

Can I use my existing business name as the name of my new company?

Yes, you can. Whoever owns the business name will need to be either a Director or a shareholder of the new company being incorporated. At the time of incorporation you will need to quote the ABN of the entity that holds the Business Name.

How do I renew my business name?

Renewing a business name can be done directly with ASIC via your ASIC Connect account. If you don’t have an ASIC Connect account you are able to create one at https://asic.gov.au/ by clicking on the blue “ASIC Connect” button.

You must have already received your business name renewal notice in order to renew the business name. Via ASIC Connect you are able to renew the name for either a one or three year period, pay for the renewal and request an invoice.

You can find more information about renewing a business name on the ASIC website

Can I re-register a cancelled business name?

Yes. If ASIC cancel a business name as a result of unpaid renewal fees, you are able to apply to ASIC directly to have the business name re-instated. For 6 months following the cancellation ASIC will not allow anyone else to register the business name.

What is a business name?

A business name is a name, other than its legal name, by which an entity can trade or be recognised.

Once registered, the business name appears on the public register so people can identify the individuals, companies, registered bodies or other organisations that hold the business name.

Do I have to register a business name?

If you choose to operate as a sole trader, partnership or a trust then you will need to register your business name with the Australian Securities & Investments Commission (ASIC) unless you trade under:

  • your own individual name; or
  • all of the individual names of the partners in a partnership

If you are not sure whether you need to register a business name, or need help to choose the right structure for your business, you may wish to obtain advice from a professional advisor such as a lawyer or accountant.

The obligation to register a business name is entirely separate to any steps that business owners may take to protect any intellectual property rights in a name or brand, such as registering a trademark.

Who can register a business name?

  • Any entity with an ABN.

    This could be:

    • an individual (for example, a sole trader)
    • an incorporated entity, including an Australian registered company (has an ACN), an Australian registered body (has an ARBN) or other incorporated entity (no ACN or ARBN)
    • an unincorporated entity, including a trust, superannuation fund or unincorporated body or association
    • a partnership or joint venture partnership, or
    • a joint venture.

How long can I register a business name for?

You can register a business name for either 1 year or 3 years. Patricia Holdings takes the hassle out of the registration process and we are able to register a name on your behalf. Click here for more information.

Can I transfer a business name?

Yes, you can transfer a business name from one ABN to another.

You can transfer a business name by logging into or creating an ASIC Connect account by going to ASIC Connect. You will need to start a "cancel/transfer" process which will provide you with a transfer number. This number is then used to register the business name to the new ABN in the same manner as registering a new business name.

Patricia Holdings can transfer the business name for the same cost as registering a business name.

Does a business name give me the exclusive right to use that name?

While having a registered business name will prevent others from registering the same or very similar business name or company name with ASIC, it does not give you ownership of the name or the exclusive right to use the name. Registering a business name:

  • does not stop another person from registering a similar name
  • will not prevent the name being registered as a trademark
  • will not prevent the name being used by someone that has already registered it as a trademark; and
  • does not protect you from legal action if the name of your business infringes the intellectual property rights of another (for example, a name which is a registered trademark).

What should I do before applying for a business name?

Check to see if the name is identical or similar to a registered trademark, by using the free IP Australia Trade Mark Check (TM Check).

If you would like to register a domain name in addition to your business name, check to make sure that the domain name you want is available.

Check any state or territory licences you may require to use a name or conduct a particular type of business in your state or territory. For more information go to Business Licence Information Service.

Do I need an ABN before applying for a business name?

Yes. The individual or entity you are seeking to register a business name for must first have an ABN or an ABN application reference number before they can apply for a business name. While the business name will be reserved on the ASIC register, the business name will not be considered "registered" until your ABN application is approved and an ABN granted.

How can I update the details of my business name?

You will need to go to the ASIC Connect website and register yourself as a user and then link your business name to your login using the "Link a Business Name" function on the right hand side of the web page once you have logged in.

Once you have linked your business name to your login just follow the prompts to make any required changes.

Can ASIC send my ASIC key to another party, such as a registered agent?

Yes. You can ask ASIC to send your ASIC Key to your registered agent. You generally need to give your written authority for ASIC to provide your ASIC key to a third party (exceptions are made for large agents).

How can I check whether the business name I want to register is available?

You will be able to check the availability of a new business name by searching the asic name availability register for existing names before progressing with an application for registration of a new business name.

Before registering a business name, you should conduct a trade mark search.

For more information you can search Australian trade marks at IP Australia Trade Mark Check (TM Check) and domain names at Domain Name Administrator(auDA).

How will ASIC determine if a business name can be registered?

ASIC provides a search function that allows the user to determine whether a business name is available for registration.

You are able to search your proposed names availability here

You will also find information about reviewing an ASIC decision on the link above.

Can I appeal the decision if my proposed business name is rejected?

Yes, you can seek a review of an ASIC decision by lodging your request within 28 days of being notified of the decision. You should submit a copy of your application. If you are still not satisfied with their decision, you may apply to the Administrative Appeals Tribunal for further review.

Will ASIC issue a business name certificate and do I need to display it?

ASIC will issue a record of registration following business name registration and each renewal. You do not need to display the record of registration by law, although you may wish to. You are still required to display the business name.

Am I able to set up a company with the same name as a registered business name?

Yes, this is possible. The only ASIC regulation is that the holder of the business name be a part of the company at the time of incorporation. If the business name holder is:

  • a sole trader, then this individual must be an Officer or Member of the company at the time of incorporation.
  • a company, then the company must be a Member of the new registration.
  • a trust, then the trustee of the trust must be a member of the company holding the shares non-beneficially for the trust. The trust deed will also need to be sighted by ASIC proving the trustee of the trust is who is listed; this can be emailed to Patricia Holdings who will forward on to ASIC with the 201.
  • a partnership, then all members of the partnership must be Officers or Members of the company
  • an incorporated association or any other organisation holding an ABN, then the association or organisation will need to be a Member of the company

The entity holding the business name does not need to be involved with the company beyond the point of incorporation and can be ceased as an Officer or Member of the company as early as the next day.

Is it best to register a business name before or after registering a company?

Business names are registered to an ABN however an ABN for a company can only be applied for once an ACN has been issued by ASIC, so this really depends on if you’re already trading or not. If you’re not already trading then we suggest waiting until you have registered your company. Outside of needing an ACN to have an ABN, there are three main reasons for this:

  1. It can be difficult to register a company (depending on who the business name holder is) with the same name as your business name.
  2. Transferring a business name from one entity to another comes with the same fees as registering a business name – this means you may end up paying double the registration fees.
  3. If you are registering a business name that is exactly the same as an existing company’s name, then only that company can register the business name (as it is already considered “taken” to ASIC) – this can save on registration fees as you may not need to register the business name.

If you are already trading, chances are you already have a business name registered. You can either use this name to register your new company (see article Can I set up a company with the same name as a registered business name?) or you can transfer the business name to the company’s ABN once obtained

Can I register a company using an existing business name?

You can register a Company using an existing business name provided the owner of the business name is involved in the proposed Company as either an officer or member. Simply select ‘Yes’ to the question on our order form that asks whether the proposed Company name is identical to an existing business name and provide us with the ABN of the entity that owns the name.

The exact requirements will depend on the type of entity that owns the business name – the most common are below:

Sole Trader

If the business name is registered to the ABN of a sole trader, that individual will simply need to be an officer or member of the proposed Company.

Company

The business name owning company must be a member of the proposed Company (regardless of whether the directors of each company will be the same).

Trust

If the business name is registered to the ABN of a trust, we will require a copy of the trust deed as ASIC will need to view it in order to prove who the trustee of the trust is, and confirm that the trustee is involved in the proposed Company.

Partnership

If the business name is owned by a partnership, each member of the partnership must be involved in the proposed Company.

Should I cancel my business name if I want to register a company using that name?

If a business name is cancelled by the holder, it will be unavailable to the public for a period of four months starting from the date of cancellation. Cancelling the business name is therefore not recommended if you are wanting to register a company using the name in a timely manner.

SMSF Trusts

What is a Superannuation Trust?

A Superannuation Trust is a Self-Managed Superannuation Fund (SMSF).

An SMSF is a trust structure that provides benefits to its Members upon retirement. The main difference between an SMSF and other super funds is that the Members are also the Trustees of the fund giving them a high level of control when it comes to tailoring the fund to meet their individual needs.

SMSFs will have between one and four Members.

The Trustee(s) will either be all Members of the SMSF, or a Corporate Trustee whereby all Members of the SMSF are Directors.
If there is only one member of the fund then that member plus another person unrelated to the Member will be Trustees unless that second person is the employer of the member then they should be related.
For a single Member SMSF with a Corporate Trustee, either the single Member will be the Sole Director of the Company or it will be a two Director company with the Member being one and an unrelated second person being the other (unless they are the employee of the Member as above).

How is a binding death benefit nomination updated?

The Patricia Holdings Trust deed provides that the Nominations can be renewed every 3 years but do not have to be renewed. It also provides that there can be an agreement between the Trustee and the Members (that binds the Trustee) setting out how the members benefits are to be distributed if the member dies.

When should a Superannuation Trust deed be updated?

A Superannuation Trust deed should be updated whenever there is a significant change in the law. As a general rule of thumb the Trustees of a Superannuation Fund should consider reviewing the Trust deed every two years and should update at least every four years. The Funds Auditor may provide some guidance regarding this.

How is the name of a Superannuation Fund changed?

Patricia Holdings can help change the name of your SMSF. The Trustee elects to change the name of the Fund and then confirms that election in writing. A Trustee must ensure that if a Fund changes its name that every person who has business dealings with the Fund and every Nominated Beneficiary of the Fund are notified of the change of name. We can provide all the paperwork required for $187 delivered as a PDF or $220 for printed and couriered documents.

Does a Superannuation Trust have to have a Trustee?

Yes, every Superannuation Trust must have a Trustee. This is because the law requires that for a Trust (an SMSF is a Trust) to exist there must firstly be some Trust property and secondly, it is the Trustee (or Trustees) who hold the Trust property on Trust for a Beneficiary or Beneficiaries (there must be a separation between the legal and equitable ownership). A Trust is not considered a legal entity.

In the case of Superannuation Trust the Superannuation Laws requires that a Superannuation Trust must have a Trustee.

All the Members must be Trustees if the Trustees are individuals (except in the case of Members who are not eligible to be Trustees i.e. minors, bankrupt, unsound mind, then an authorised representative would be appointed) and if the Trustee is a company then all of the Members must be the directors of the Trustee Company where eligible.

If there is only one member then there must be 2 Trustees if the Trustees are individuals. The Trustee who is not the member can be a relative of the member only if they are the employer of the Member or a non-relative of the member if they are not their employer.

If there is only one member and the Trustee is a company then the Trustee company can be a single member company of which the member is the sole director or it can be a two Director company whereby the second Director is a relative of the member only if they are the employer of the Member or a non-relative of the member if they are not their employer.

How is a Superannuation Trust wound up?

A Trustee winds up a Superannuation Trust by:

  • making a Declaration (in writing) that the Trust is to vest (that is the Trust ends and the Trust assets be distributed to the Beneficiaries);
  • collecting in all of the Trust assets and converting them into cash (unless the Trustee proposes to make an in specie distribution);
  • all debts of the Trust must be paid and all tax must be paid;
  • The assets (or cash) are then distributed amongst the Members or Members dependants according to the members share in the Superannuation Trust;
  • notice is then given to the Taxation Department that the Trust has ceased to exist.

If any Member is under the age (retirement after age 55, permanent disability, death etc) when the Superannuation Trust can make payments to the Member then that particular Members share must be paid to another complying Superannuation Fund.

Who can be a Trustee of a Superannuation Trust deed?

Under section 17 of the SIS Act (and as set out in the definitions section of the Patricia Holdings Superannuation Trust deed) the Members must be the Trustees, or if the Trustee is a Company then the Directors of the Trustee Company must be the same persons as the members.

If there is only one Member of the Superannuation Fund then that Member plus another person unrelated to the Member will be Trustees, unless that second person is the employer of the member then they should be related. For a single Member SMSF with a Corporate Trustee, either the single Member will be the Sole Director of the Company or it will be a two Director company with the Member being one and an unrelated second person being the other (unless they are the employee of the Member as above).

Minors (a person under 18) cannot be Trustees or Directors of a Trustee Company. But a Legal Personal Representative of a minor can represent the minor.

Bankrupted and disqualified persons cannot be Trustees' or Directors of a Trustee Company.

How and when can payments be made from my SMSF to its Members?

You can access your super when you reach your preservation age. This is the minimum age, set by law, which your super must be preserved until and is currently between 55 and 60. Once you reach this age, you can access your super as long as you are permanently retired (or reached age 65). If you haven’t permanently retired, you can still access part of your super through a transition to retirement pension.

When the Trustees of the Superannuation Fund are individuals then payments from the Superannuation Fund to its Members must be made in the form of a pension. That restriction does not apply in the case of a Corporate Trustee. In this instance, payments can be made in lump sum or pension.

Can the Trustee of a Bare Trust used for Limited Recourse Borrowing Arrangements be the same as the Trustee of the related Superannuation Trust?

If the trustee is a corporate trustee then the answer is no. The Superannuation Industry Supervision Act is specific, under section 67 A & B that the Trustee must be a different legal entity. The Trustee can be an individual, a group of individuals or a Company. Directors of the Corporate Trustee of the Bare Trust can be the same as the members of the Fund.

It is in our experience that most banks will not lend to a Bare Trust with individual Trustees.

What happens when all of the Members of a Self-Managed Superannuation Fund have died?

When all of the Members of an SMSF have died the assets of the SMSF must be distributed amongst the dependants of the deceased Members or paid to the personal legal representative of the deceased Members to be distributed in accordance with the Will of the deceased Members. If a Member has given the Trustee a direction in writing either in the form of a binding death benefit nomination or in some other form then the Trustee may distribute the Member's share of the fund in accordance with that direction.

Care should be taken when distributing a deceased Member's share of a SMSF because there are different taxation consequences attached to different distributions. 

Can death benefit nominations be non-binding?

Yes, the law was changed in 2008 to allow non-binding death benefit nominations, and these are permitted by the Patricia Holdings deed. A Death Benefit Nomination form will be provided with any deed purchase.

Family Trusts

What is a Family Trust?

Also commonly referred to as a “Discretionary Trust” a Family Trust formalises an arrangement where a Trustee is permitted to hold assets for a Beneficiary (or Beneficiaries) and to distribute income and capital between the Beneficiaries as and when the Trustee exercising discretion decides. The trust deed includes a wide pool of general Beneficiaries with lineal and lateral relations to the nominated Beneficiaries.

The person who sets up the Trust is called the Settlor. He or she is the person who contributes the original property or amount of money (called the settled sum) to enable the Trust to commence (see question “What is the amount of a settled sum?”).

Who should be the Trustee?

The Trustee can be an individual or a company and is appointed by the Appointor when the Trust is first established. If the Trustee is an individual the Trustee should be a person in whom the Appointor and the Beneficiaries have total confidence. Commonly (and this is the Patricia Holdings recommendation) the Trustee is a company. If the Trustee is a company then the directors of the company should be individuals in whom the Beneficiaries have total confidence. There is a legal separation between individuals in their capacity as Directors of the company and their capacity as Beneficiaries of a Trust. It is very common for the Directors of the Trustee Company to be the same individuals as the Nominated Beneficiaries so in effect the Nominated Beneficiaries have effective control and management of the Trust.

Who are to be the Beneficiaries?

The Beneficiaries or Beneficiary are the persons or person for whom the Trust is established. There are commonly two levels/types of Beneficiaries.

Nominated Beneficiaries are named and are intended to be the primary Beneficiaries of the trust. A Patricia Holdings deed allows for a broad pool of General Beneficiaries associated with the Nominated Beneficiaries to give the Trustee maximum flexibility. Our Trust deed allows for the following to be deemed General Beneficiaries:

Relations of the Nominated Beneficiaries which includes the parents, brothers, sisters, spouses, widows, widowers, children, children’s children, adopted children, and any lineal or lateral relation of the “Nominated Beneficiaries”, the spouses, widows, widowers, children and grandchildren of such brothers, sisters, spouses, children and descendants and next of kin. These include any person filling any of the above categories by reason of lineage, adoption or bona fide domestic relationship, including a bona fide relationship between persons of the same gender.” “Related Corporations and Trusts”, “Directors of Related Corporations”, “Shareholders of Related  Corporations”, “Legal Personal Representative” of a General Beneficiary, and “Charities and Institutions”

The Trust deed also provides for Additional General Beneficiaries. These are Beneficiaries (persons or companies) who are not related to the Nominated Beneficiaries, so are not included in the pool of General Beneficiaries (as defined above). Persons or companies related to Additional General Beneficiaries are not included in the pool of General Beneficiaries.

Should you wish to order a “Bloodline Trust”, please contact our team on 02 9953 2399 or via This email address is being protected from spambots. You need JavaScript enabled to view it..

How is a Trustee in a Family Trust changed?

The existing Trustee may resign or be removed. If by resignation it can be verbal or in writing (in writing is preferable).

If there is more than one Trustee, the notice, whether verbal or in writing, is given to the other Trustee or Trustees if there is more than one Trustee. If there is only one Trustee then the notice is given to the Nominated Beneficiaries.

A Trustee can be removed by the Appointor. Depending upon the wording of the Deed, either the retiring Trustee appoints a new Trustee or the Appointor appoints a new Trustee. The appointment should be in writing, preferably by Deed and should be signed by the new Trustee and incorporate an undertaking by the new Trustee to act as Trustee and discharge the duties of a Trustee set out in the Deed and at law.

Most Family Trust deeds provide that it is the Appointor that has the power to remove an existing Trustee and appoint a new Trustee.

The Patricia Holdings Family Trust deeds provide that the Appointor is the person who may remove a Trustee and appoint a new Trustee except in the following cases:

  • if there is no Appointor then a Trustee (either the retiring Trustee or a continuing Trustee) has the power to appoint a new Trustee 
  • if the Trustee has died then the deceased Trustee's Executor (Legal Personal Representative) has the power to appoint
  • if the Trustee or Legal Personal Representative fail or refuse to appoint then the Nominated Beneficiaries can appoint.

How is a new Trustee added to a Family Trust?

In the current Patricia Holdings Family Trust deed, it is either the Trustee or the Appointor who has the authority to add a new Trustee. The appointment can be verbal or in writing (in writing is preferable). Generally the appointment is in the form of a Deed. The new Trustee must, when accepting the appointment, undertake to carry out the duties of Trustee and discharge the obligations contained in the Trust deed and at law.

How do you remove a Beneficiary?

This depends entirely upon the wording of the Trust deed. Most Trust deeds provide that there are two ways of removing a Beneficiary:

  1. the Beneficiary by document in writing renounces his or her interest as a Beneficiary (a Renunciation may be mandatory if the change is made in conjunction with a Centrelink Declaration); or
  2. the Trustee makes a declaration that henceforth a particular Beneficiary will no longer be a Beneficiary. The Trustee should carefully study the Deed to make sure that the Trustee has that power. The Patricia Holdings Deed does give the Trustee the power to remove a Beneficiary. The Trustee should be very careful when removing a Beneficiary not to create a re-settlement.

What is the minimum amount of a settled sum?

Any amount however small can be the settled sum. It can be as low as $1.00, commonly it is $10.00 or $100.00. It is a good idea to make the settled sum sufficiently large so as not to be completely absorbed by Bank Fees. What a Trustee must be ever vigilant for is to ensure that the settled sum is properly receipted into the funds of the Trust and accounted for throughout the life of the Trust. This is because if the settled sum is never paid to the Trustee as the seed capital of the Trust then the Trust never comes into existence.

Who are the Additional General Beneficiaries?

The Additional General Beneficiaries are Beneficiaries who don’t fall within any of the categories as defined by “General Beneficiaries”. These could be a neighbour or a close friend.

Our order form invites you to nominate “Additional General Beneficiaries” if you choose. Individuals or entities named as Additional General Beneficiaries are Beneficiaries of the trust but do not benefit from the lineal or lateral provisions that the Nominated Beneficiaries enjoy. I.e. the Trustee has no discretion to distribute income or capital to related individuals or entities related to the “Additional General Beneficiaries”.

A Charity can be an Additional General Beneficiary.

Who are the Beneficiaries in the Patricia Holdings Family Trust?

The Nominated Beneficiaries in the Patricia Holdings Family Trust are the person(s) named and described in the schedule.

The General Beneficiaries are:

(a) the “Nominated Beneficiary” or “Nominated Beneficiaries”, and

(b) the “Relations of the Nominated Beneficiaries”, and

(c) “Related Corporations and Trusts”, and

(d) “Directors of Related Corporations”, and

(e) “Shareholders of Related Corporations”, and

(f) the “Legal Personal Representative” of a General Beneficiary, and

(g) “Charities and Institutions”, and

(h) any additional persons (if any) that are named, described or defined in the Schedule as

The Additional General Beneficiaries are Beneficiaries who don’t fall within any of the categories as defined by “General Beneficiaries”. These could be a neighbour or a close friend.

Our order form invites you to nominate “Additional General Beneficiaries” if you choose. Individuals or entities named as Additional General Beneficiaries are Beneficiaries of the trust but do not benefit from the lineal or lateral provisions that the Nominated Beneficiaries enjoy. I.e. the Trustee has no discretion to distribute income or capital to related individuals or entities related to the “Additional General Beneficiaries”.

A Charity can be an Additional General Beneficiary.

Why would I exclude Foreign Beneficiaries from my Family Trust?

Since 2015, the various State Revenue Offices (SROs) have been introducing potential surcharges on trusts that do not exclude foreign persons (or “absentees”) as beneficiaries, or, have foreign persons acting as trustee and hold property in the trust. Generally speaking, ‘foreign person’ means a person (or entity) that does not ordinarily reside in Australia and can include:

  • an individual
  • a corporation
  • a trustee of a trust
  • a beneficiary of a trust
  • a government
  • a government investor
  • a partner in a limited partnership.


Even if a foreign person has not been named as a beneficiary, due to the general pool of beneficiaries defined in the deed, a foreign person may in fact be eligible to receive distributions thus the trustees may be liable for surcharge payments even when they have not, nor do they intend to, distribute to foreign persons.

Patricia Holdings offer two versions of our Family (or Discretionary) Trust Deeds for whether you wish to allow or disallow foreign persons from benefiting from the trust. If your deed has already been prepared and does not currently exclude foreign persons, we can prepare an amendment for you irrevocably excluding foreign persons from benefiting. This amendment can be ordered here.

For an overview of the surcharges currently in place around the country, please download our fact sheet.

How is the name of a Family Trust changed?

Patricia Holdings can help change the name of your Trust. The Trustee elects to change the name of the Trust and then confirms that election in writing. A Trustee must ensure that if a Trust changes its name that every person who has business dealings with the Trust deed and every Nominated Beneficiary of the Trust is notified of the change of name. We can provide all the paperwork required for $187 delivered as a PDF or $220 for printed and express posted documents.

Does a Family Trust have to have a Trustee?

Yes, every Trust  must have a Trustee. This is because the law requires that for a Trust to exist there must firstly be some Trust property and secondly, it is the Trustee (or Trustees) who hold the Trust property on Trust for a Beneficiary or Beneficiaries (there must be a separation between the legal and equitable ownership). A Trust is not considered a legal entity.

How is a Family Trust wound up?

A Trustee winds up a Trust by:

  • making a Declaration (in writing) that the Trust is to vest (that is the Trust ends and the Trust assets be distributed to the Beneficiaries);
  • collecting in all of the Trust assets and converting them into cash (unless the Trustee proposes to make an in specie distribution);
  • all debts of the Trust must be paid and all tax must be paid;
  • if the Trust is a Family Trust, the Trustee must exercise a discretion and determine who among all the Beneficiaries is to receive the Trust assets;
  • the assets (or cash) are then distributed;
  • notice is then given to the Taxation Department that the Trust has ceased to exist.

Can a sole personal Trustee be a sole Nominated Beneficiary?

Generally speaking, no. There must be a difference between the legal person of the Trustee and the legal person of the Beneficiary to enable a Trust to exist. However it can validly be argued that in all Family Trusts, because there are General Beneficiaries as well as Nominated Beneficiaries, the answer is they can be. It is Patricia Holdings experience though that most Banks refuse to lend to a Trust where the Trustee is one and the same as the sole Nominated Beneficiary.

Can the Settlor be a Beneficiary?

No, for two reasons:

  1. Section 102 of the Income Tax Assessment Act 1936 provided that if the person who establishes a Trust (the Settlor) has the power to terminate a Trust (that is, is the same person as the Trustee and in some cases a Beneficiary) then the Trust will be deemed not to exist and the Settlor will be personally taxed on the whole of the Trust income.
  2. If the Settlor is a Beneficiary then the Settlor will not have divested him/her self of the Trust assets and as a consequence no Trust relationship can exist.

If a Beneficiary of a Family Trust is a Trust, who is to be named as the Beneficiary?

Much like holding shares in a company, as a Trust is not a legal entity, it cannot be named as the beneficiary. Instead, it should be listed as the Trustee of the Beneficiary Trust "as Trustee for" the Trust.

Who can be the Trustee of a Family Trust?

Any individual, company, or incorporated association can be a Trustee provided that the person or directors are not bankrupt, minors, or disqualified persons.

What address should be shown for Trustees and Beneficiaries?

Any address that will enable the Trustee and Beneficiary to be identified usually the registered office for a company or Trust and a residential address for an individual.

Must the Trustee of a Family Trust have an Australian address?

The Trustee must have an Australian address as they have Governance responsibility for the Trust and therefore need to be accessible to the Legal Jurisdiction under which they operate. The state or territory of Jurisdiction can be nominated, but should the Trust be subject to legal proceedings, this is only one of the factors that will be taken into account when determining the appropriate Jurisdiction for the action.

Can a Settlor be changed?

If the Trust has already been settled and the settled sum paid to the trustee, no. The sole function of a Settlor is to establish the Trust. Once established and the settled sum has been paid to the Trustee the Settlor has no further involvement with the Trust thus there is no point in changing the named Settlor.

Can a Beneficiary be added to a Family Trust?

Generally speaking, yes, however this is not advised.

The definition of Beneficiary in most Family Trust deeds is very broad so it may not ever be necessary to add a Beneficiary. It is also worth noting that if a Beneficiary that could not be contemplated under the wide definition is added, then the addition can create a resettlement which can result in Capital Gains Tax and Stamp Duty being required to be paid for a second time. We suggest you seek independent legal advice before looking to add beneficiaries to an already settled trust.

How long does a Family Trust Deed last?

A Trust  must vest (be wound up and its assets distributed) within 80 years of being set up (except in South Australia where the Law relating to perpetuities does not apply). The Patricia Holdings Trust deed provides for the Trust to have a maximum life of 79 years. A Trust can be wound up at any time within the 79 years.

What is the difference between a family trust and a company?

These are two totally different things – a trust is an arrangement between 2 or more parties. It is a set of responsibilities that are imposed on a nominated party (the trustee) to hold assets on behalf of another party. A company is a legal entity registered with ASIC, that exists separately from its owners (its shareholders). A company’s status as a separate legal entity gives it the same rights as a natural person, meaning it can be sued, is liable for debts and it can sue another entity.

Can my Discretionary (Family) Trust be considered a business?

A trust is an arrangement between two or more parties whereby one party (the trustee) holds the assets within the trust on behalf of another party (the beneficiaries). While a trust can operate a business, the trust itself should not be considered a business. The trust deed provides rules, powers and guidelines and would need to written in such a way that allows a business to trade through a trust. Generally speaking, a company will act as the trustee of the trust and there will be nominated beneficiaries (usually the business owner and a beneficiary company). The trustee will then register a business name which will become the name the business trades under. This type of business structure is generally preferred for business owners seeking tax minimisation.

Should I use a corporate trustee for my Family Trust?

A corporate trustee has several advantages over an individual trustee:

Immortality

A corporate trustee, being a separate legal entity, can exist indefinitely, whereas individual trustees will eventually die, may become incapacitated, or may want out for another reason.

Legal ownership of the trust assets

Assets in a trust are held in the name of the Trustee on behalf of the trust. If individuals act as the trustee of your trust and you later want to change the trustee, you will have to change the legal owner of your trust’s assets.  Conversely, you can simply change the shareholders and directors of a corporate trustee which will not change the legal owner of the trust’s assets.

Asset protection & limited liability

Individual trustees can be personally liable for any loans taken out or liabilities that the trust may incur. If a corporate trustee is used, liability will generally be limited to the assets of the trustee company itself.

Who owns the trust assets in a Family Trust?

A trust is not a legal entity in itself and cannot own property. Instead a trust describes a relationship between various parties whereby a trustee or trustees (the legal owner) hold trust property on behalf of beneficiaries (the beneficial owner(s)). In the context of a Family trust the trustee holds the trust property on behalf of the nominated and general beneficiaries.

Can a sole person be trustee, appointor and beneficiary of a family trust?

This is generally considered bad practice.

Some arguments state that they can be, however the trustee MUST show that they have at least considered other beneficiaries (as defined in the pool of beneficiaries) other than themselves. If this is not able to be shown, then it can be argued that a trust arrangement does not actually exist. We always recommend having at least one other person be nominated trustee, appointor or beneficiary in the trust to avoid such situations. We also suggest seeking independent legal, financial or tax advice prior to placing your trust deed order with us as we cannot advise you on your own individual circumstance.

Unit Trusts

What is a Standard Unit Trust?

A Standard Unit Trust is a Trust divided into units all of the same class that gives the Unit holders equal rights to vote and share in the distribution of income and capital in proportion to the number of Units held.

A Unit Trust  does not have a Settlor.

What is a Multi-Class Unit Trust?

This form of Trust is a Trust with different classes of units each having different rights to share in the distribution of capital and income. Some units may have a right to vote and others may not, similar to different Shares in a company structure. Our Multi Class Unit Trust provides 13 different classes of Unit each with differing rights.

What is a Fixed Unit Trust for NSW Land Tax purposes?

Revenue NSW’s definition of a Fixed Trust states that it is a trust where the beneficiaries (or Unit Holders) are considered to be owners of the land at the taxing date of midnight on 31 December prior to the tax year.

This type of Trust applies only to NSW. It is a standard Unit Trust whereby the unit holders are entitled to a fixed proportion of income and capital distribution from the Trust. Revenue NSW stipulates that the Deed must meet the following criteria:

  • The unit holders are entitled to all income of the Trust (after the payment of normal expenses)
  • The unit holders are presently entitled to the capital of the Trust and may require the Trustee to wind up the Trust and distribute the property or the net proceeds of the Trust
  • Unit Holder entitlements cannot be removed, restricted or otherwise affected by the exercise of any discretion or by failure to exercise any discretion.
  • There must only be one class of units issued and the proportion of trust capital to which a unit holder is entitled on winding up or surrendering of units must be fixed and must be the same as the proportion of income of the trust to which the unit holder is entitled.

If a Trust meets the requirements of section 3A of the Land Tax Management Act, then the Trust will not, for Land Tax purposes, be deemed a Specialty Trust and will be entitled to the benefit of the Land Tax threshold exemptions available in NSW.

What is a Hybrid Unit Trust?

A Hybrid Unit Trust combines a Multiclass Unit Trust with a Family Trust component to allow a Trustee to distribute to the lineal and lateral relations of the Unit Holders in addition to Unit Class related distributions.

How is a Trustee in a Unit Trust changed?

The Patricia Holdings Unit Trust provides that 62% of the Unit Holders have the power to remove and appoint a Trustee (clause 34). This percentage is a purely arbitrary figure and could be any other percentage as long as it is a majority percentage.

How is a new Trustee added to a Unit Trust?

To add a new Trustee is relatively simple. The appointment can be made verbally or in writing; preferably in writing. The appointment is made by a 62% majority vote of the Unit Holders. Generally the appointment is in the form of a Trust deed because a Trust deed is a more legally binding document. The additional Trustee must when accepting the appointment undertake to carry out the duties of Trustee and discharge the obligations contained in the Trust deed and at law.

How do you remove a Unit Holder?

Much like in a company structure, a Unit Holder can sell his or her units back to the Trustee if the Trustee agrees to re-purchase the units. Alternatively, the Unit Holder can sell them to the other Unit Holders (transfer of Units) in the Trust. If no Unit Holder wants to purchase the Units then the units may be sold on the open market if a purchaser can be found.

What is the minimum number of units one can have in a Unit Trust?

In a Unit Trust, the Trustee issues units to the Beneficiaries of the trust assets. There can be as few as one unit issued in a Unit Trust although, to avoid the possibility of a Unit Trust being deemed to be a Fixed Trust, there should be at least two units issued.

How is the name of a Unit Trust changed?

Patricia Holdings can help change the name of your Trust. The Trustee elects to change the name of the Trust and then confirms that election in writing. A Trustee must ensure that if a Trust changes its name that every person who has business dealings with the Trust and every Nominated Beneficiary of the Trust are notified of the change of name. We can provide all the paperwork required for $187 delivered as a PDF or $220 for printed and couriered documents.

Does a Unit Trust have to have a Trustee?

Yes, every Trust must have a Trustee. This is because the law requires that for a Trust to exist there must firstly be some Trust property and secondly, it is the Trustee (or Trustees) who hold the Trust property on Trust for a Beneficiary or Beneficiaries (there must be a separation between the legal and equitable ownership). A Trust is not considered a legal entity.

How is a Unit Trust wound up?

A Trustee winds up a Trust by:

  • making a Declaration (in writing) that the Trust is to vest (that is the Trust ends and the Trust assets be distributed to the Unit Holders);
  • collecting in all of the Trust assets and converting them into cash (unless the Trustee proposes to make an in specie distribution);
  • all debts of the Trust must be paid and all tax must be paid;
  • The assets (or cash) are then distributed amongst the Unit Holders according to the Unit Holdings in the Unit Trust Deed;
  • notice is then given to the Taxation Department that the Trust has ceased to exist.

If a Unit Holder in a Unit Trust is a Trust, who is to be named as the Unit Holder?

Much like holding shares in a company, as a Trust is not a legal entity, it cannot be named as the beneficiary. Instead, it should be listed as the Trustee of the Unit Holding Trust “as trustee for” the Trust

Who can be the Trustee of a Unit Trust?

Any individual, company, or incorporated association can be a Trustee provided that the person or directors are not bankrupt, minors, or disqualified persons.

Must the Trustee of a Unit Trust have an Australian address?

The Trustee must have an Australian address as they have Governance responsibility for the Trust and therefore need to be accessible to the Legal Jurisdiction under which they operate. The state or territory of Jurisdiction can be nominated, but should the Trust be subject to legal proceedings, this is only one of the factors that will be taken into account when determining the appropriate Jurisdiction for the action.

How long does a Unit Trust last?

A Trust  must vest (be wound up and its assets distributed) within 80 years of being set up (except in South Australia where the Law relating to perpetuities does not apply). The Patricia Holdings Trust deed provides for the Trust to have a maximum life of 79 years. A Trust can be wound up at any time within the 79 years.

What is the difference between a unit trust and a company?

These are two totally different things – a trust is an arrangement between 2 or more parties. It is a set of responsibilities that are imposed on a nominated party (the trustee) to hold assets on behalf of another party. A company is a legal entity registered with ASIC, that exists separately from its owners (its shareholders). A company’s status as a separate legal entity gives it the same rights as a natural person, meaning it can be sued, is liable for debts and it can sue another entity.

Should I use a corporate trustee for my Unit Trust?

A corporate trustee has several advantages over an individual trustee:

Immortality

A corporate trustee, being a separate legal entity, can exist indefinitely, whereas individual trustees will eventually die, may become incapacitated, or may want out for another reason.

Legal ownership of the trust assets

Assets in a trust are held in the name of the Trustee on behalf of the trust. If individuals act as the trustee of your trust and you later want to change the trustee, you will have to change the legal owner of your trust’s assets.  Conversely, you can simply change the shareholders and directors of a corporate trustee which will not change the legal owner of the trust’s assets.

Asset protection & limited liability

Individual trustees can be personally liable for any loans taken out or liabilities that the trust may incur. If a corporate trustee is used, liability will generally be limited to the assets of the trustee company itself.

Who owns the trust assets in a Unit Trust?

A trust is not a legal entity in itself and cannot own property. Instead a trust describes a relationship between various parties whereby a trustee or trustees (the legal owner) hold trust property on behalf of beneficiaries (the beneficial owner(s)). In the context of a unit trust, the trustee holds the trust property on behalf of the unit holders. The income and distributions of the trust are split between the unit holders according to the units held.

Company

Do you have companies on the shelf?

No, we do not sell shelf companies. All of our companies are new. Your company will be incorporated with your choice of name, directors and shareholders.

How do I order a company and what is the process?

Through Patricia, you can order your company online, or you can download an order form and email or fax it to us. Online ordering is marginally cheaper than completing a “manual” order form.

To order a company you can follow the links to online ordering.

Click “here” to download a PDF order form for a Standard Pty Ltd Company.

If we have any queries about your order or require any further information we will contact you as soon as possible.

After the company is incorporated the documents are sent out to you by email and/or courier depending on your selection.

How much does it cost to register a company?

The cost varies between company types. Prices can be found here.

Patricia Holdings can incorporate your company, and deliver it to you by courier, printed and bound in a special purpose professional folder from $280 (ex gst) + ASIC fee if you order your company online. When you order our bound hard copy product, for just an additional $15 (ex gst), we will email you a PDF version of your register.

If you prefer to only receive a PDF of your company register, Patricia Holdings charges from $150 (ex gst) + ASIC fee if ordered online.

We offer clients the ability to order via email on a "manual" order form which costs an additional $60 (ex gst) service fee.

How long until I receive my company register?

We offer clients the ability to order companies 24 hours a day, 7 days a week via our online “Instant” system. In circumstances where the order is error free, does not get flagged for manual review at ASIC and the ASIC system is not down for maintenance, companies are often incorporated and company documents delivered to your email within 10 minutes of the order being received by us.

Where you would like us to review your company data before incorporation, companies are normally delivered as PDFs within an hour of the order being received.

If you are in the Sydney metropolitan area, and order before midday, we are normally able to deliver your couriered company register on the same day. For other areas, or orders received later in the day, in most cases company folders are delivered the next day. For more remote and rural areas delivery can take up to 3 days.

How do I fix a mistake in my company documents?

If you have made a mistake in your application and your company has been incorporated with incorrect information you will need to contact ASIC directly. If your mistake is immaterial then ASIC may well be willing to correct the error over the phone. More serious mistakes made by you can be fixed by lodging a Form 492 with ASIC. We are unable to lodge this on your behalf but are more than happy to assist you with the process. ASIC require evidence that we made the mistake if they are to accept the Form 492 from us.

And of course, if we make a mistake we will promptly lodge the Form 492 to rectify the error. 

How do I make changes to my company after incorporation?

ASIC needs to be notified of all changes to the company after its incorporation. ASIC provides information about ongoing compliance here and has a range of forms that need to be completed and lodged.

Patricia Holdings is also able to assist with all of your company changes including lodging forms with ASIC and providing minutes for the company register. In most cases, we charge from $100 (ex gst) to lodge your forms with ASIC and provide you with the necessary documents and minutes for your register.

What type of companies can Patricia Holdings register?

Patricia Holdings is able to register most company types. We can incorporate and provide compliant documents for the following types of companies:

  • Proprietary Limited (Pty Ltd)
  • Superannuation Trustee
  • Public
  • Limited By Guarantee
  • Home Unit

How can I deregister a company?

If you no longer need your company, you can voluntarily deregister your company through ASIC.  This is subject to the following prerequisites:

  1. All members of the company agree to the deregistration
  2. The company is not carrying on business
  3. The company's assets are worth less than $1,000
  4. The company has paid all fees and penalties payable under the act
  5. The company has no outstanding liabilities
  6. The company is not a party to any legal proceedings

Patricia Holdings can complete the required forms, lodge them with ASIC and provide you with the necessary minutes. For more information, click here.

ASIC will then notify Patricia Holdings when they have approved the application (usually about 2 weeks). The application to deregister the company will then be published in the ASIC Gazette which can take around 2 months.

How can I find out if the company name I want is available?

You can check the availability of your chosen name by searching the ASIC register “here

Alternatively you are more than welcome to call or email us and we can search the name for you.

What information do I need to register a company?

Different company types have different requirements.

At a minimum you’ll need:

  • A company name
  • State of registration
  • A registered office address - a PO Box address is not acceptable
  • Principal place of business address- a PO Box address is not acceptable
  • Officeholder details (full name, residential address, date & place of birth)
  • Members names and addresses (shareholders)
  • Number, class and value of shares

How many Directors do I need in a company?

For a Proprietary Company - one (1).

If an overseas Director is appointed to a Proprietary Company it must also have an Australian Resident as a Director.

For Unlisted Public Companies and Limited by Guarantee (LBG) there is a minimum of 3 directors and at least 2 must be Australian residents.

Directors must be at least 18 years old and must not be a disqualified person per the Corporations Act 2001.

How many Secretaries do I need in a company?

For a standard Proprietary Company – none (0)

Appointing a Secretary is not required for a Proprietary Limited Company. All secretaries appointed must reside in Australia.

For Unlisted Public Companies and Limited by Guarantee (LBG) companies there is a minimum of 1 secretary and at least 1 must be an Australian resident.

A company secretary must be at least 18 years old and must not be a disqualified person per the Corporations Act 2001.

What is the difference between a Director, Secretary and Shareholder?

The Directors are responsible for the safe and legal running of the company. They must ensure the company complies with any laws applicable to the company’s operations, and also comply with the general duties that the law imposes on individuals that take on the role of director. Some of the key responsibilities that a director takes on include:

the duty to exercise your powers and duties with the care and diligence;

the duty to exercise your powers and duties in good faith in the best interests of the company and for a proper purpose;

the duties not to improperly use your position, or information obtained through your position, to gain an advantage for yourself or someone else, or to cause detriment to the company, and

the duty to prevent the company from trading while insolvent.

In general, the Secretary is responsible for many of the compliance and governance-related administrative tasks of the board and organisation. As company secretaries are an ‘officer’ under the Corporations Act, many of the duties that apply to directors apply to secretaries also, as well as a number of other reporting obligations related to keeping up to date ASIC records. A proprietary company is not required to have a Secretary but are permitted to voluntarily.

Broadly speaking, the shareholders are the owners of a company. A shareholder invests and is liable to the company for the amount agreed to be paid in return for a number of shares. Typically the investment affords the shareholder the right to have a say in relation to key aspects of how the company is run, such as the right to appoint or dismiss the directors of the company. A Shareholder typically also receives the financial benefits from the company.

What is a Public Officer? Is my Company required to have one?

The Public Officer of a company is the person who deals with the Tax Office in relation to the company's taxation affairs such as record keeping and submitting company returns.

Under the Income Tax Assessment Act 1936 (Cth), Companies are required to appoint a Public Officer within 3 months of the company commencing to carry on a business or derive an income in Australia. If a Company doesn't appoint a Public Officer within that 3 month period, it is guilty of an offence for each day it doesn’t have a Public Officer. Please note that we are unable to appoint the Public Officer on your behalf at the time of incorporation. 

We do however provide both a Consent to Act as Public Officer template and a notification letter that you can send to the ATO after incorporation to ensure compliance. Please note however that the Public Officer can only be appointed to a company that has a TFN and/or ABN.

If Patricia Holidings completes the ABN application for your company you will be asked to nominate a Public Officer and and we are able to appoint this person at the time of lodging the ABN/TFN application.

The appointed Public Officer a must be at least 18 years of age, an Australian resident and must understand the nature of their appointment.

How many shareholders do I need for a Company?

One (1) and that shareholder can be a person or Company. The shareholder(s) can also be an overseas person or Company.

What do you mean by beneficially or non-beneficially held?

“Beneficially held” means the shareholder gets the direct benefit of owning the shares.

“Non-beneficially” held means that the shareholder is holding the share "as trustee for" or "in trust for" a second entity such as a Trust, a company or another individual.

Can a Trust be a shareholder?

A Trust can be the beneficial owner but the Trustee of the Trust is the legal owner of the shares and holds the shares on behalf of and for the benefit of the Trust. It is the Trustee who is the shareholder of the company.

What is the value of a share?

Our website defaults shares at $1.00 however you can specify a value of your choosing. If you are registering the company with shares at less than $0.01 each, you will need to contact our office before placing the order.

Can I issue shares for other than cash?

Not on incorporation.

Do my shares have to have a value?

Yes but they can be valued in cents if you wish.

Can I have different classes of shares?

Yes. We offer a multi-class constitution that allows for shareholders to hold different classes of shares. To see the available classes and attached rights, click here.

Where can my Registered Office be?

The registered office must be an Australian physical address, not a Post Office Box. You cannot use an overseas address.

What is an Ultimate Holding Company?

An Ultimate Holding Company has overall control of another company. It can have any number of subsidiaries but cannot be a subsidiary itself. It is sometimes referred to as a controlling entity.

An example of an ultimate holding company is seen in the instance of Wesfarmers - both Kmart and Coles are separate subsidiary companies, however they are both owned by Wesfarmers, a global conglomerate that has overall control of several smaller companies.

Can I have an overseas secretary?

A public company can have an overseas Secretary provided that there is also an Australian Secretary.

For a proprietary company, regardless of how many Secretaries are appointed, they ALL must reside in Australia.

Do you register foreign companies?

No, we only register Australian Companies in Australia.

What is a Corporate Key?

This is an 8-digit number unique to a particular company that is sent directly to the Registered Office within 28 days of incorporation. It is like a pin number for your company and must be noted when you lodge some paper documents with ASIC.

If the Corporate Key has been misplaced, you will need to contact ASIC to have it reissued.

Can I go to ASIC to register my Company?

Yes, but they will only incorporate the company and provide you with a certificate of registration. They will not provide you with a company register or a constitution. It is a requirement of Corporations Law that a company maintains an up to date corporate register.

Patricia Holdings can register the company and provide you with all the compliance documents you need.

What is a company Constitution?

A company constitution is a document that sets out governing rules of a company. It is essentially a contract between the company and its shareholders and officeholders which outlines the rights and obligations that each party has.

Do I need a Constitution for my Company?

No. You can choose to operate using the “Replaceable Rules” which are a basic set of rules for managing your company found in the Corporation Act 2001, but financial institutions will generally require a Constitution for opening bank accounts and other transactions.

When a company is incorporated does that give me an ABN (Australian Business Number)?

No, ASIC supplies the ACN (Australian Company Number) and then you apply to the ATO (Australian Taxation Office) for the ABN after receiving your ACN. It is a separate process.

What is a company?

A company is an entity that has a separate legal existence from its owners. The owners of the company are known as members or shareholders. Its legal status gives a company the same rights as a natural person which means that a company can incur debt, sue and be sued. Companies are managed by company officers who are called directors and company secretaries.

The most common type of company structure is a proprietary limited company (which has the words 'Pty Ltd' after the name). This type of company does not sell its shares to the public and has limited liability.

Can I set up a company with the same name as a registered business name?

Yes, this is possible. The only ASIC regulation is that the holder of the business name be a part of the company at the time of incorporation. If the business name holder is:

  • a sole trader, then this individual must be an Officer or Member of the company at the time of incorporation.
  • a company, then the company must be a Member of the new registration.
  • a trust, then the trustee of the trust must be a member of the company holding the shares non-beneficially for the trust. The trust deed will also need to be sighted by ASIC proving the trustee of the trust is who is listed; this can be emailed to Patricia Holdings who will forward on to ASIC with the 201.
  • a partnership, then all members of the partnership must be Officers or Members of the company
  • an incorporated association or any other organisation holding an ABN, then the association or organisation will need to be a Member of the company

The entity holding the business name does not need to be involved with the company beyond the point of incorporation and can be ceased as an Officer or Member of the company as early as the next day.

 

What is the difference between a trust and a company?

These are two totally different things – a trust is an arrangement between 2 or more parties. It is a set of responsibilities that are imposed on a nominated party (the trustee) to hold assets on behalf of another party. A company is a legal entity registered with ASIC, that exists separately from its owners (its shareholders). A company’s status as a separate legal entity gives it the same rights as a natural person, meaning it can be sued, is liable for debts and it can sue another entity.

Should I register a business name before or after registering a company?

Business names are registered to an ABN however an ABN for a company can only be applied for once an ACN has been issued by ASIC, so this really depends on if you’re already trading or not. If you’re not already trading then we suggest waiting until you have registered your company. Outside of needing an ACN to have an ABN, there are three main reasons for this:

  1. It can be difficult to register a company (depending on who the business name holder is) with the same name as your business name.
  2. Transferring a business name from one entity to another comes with the same fees as registering a business name – this means you may end up paying double the registration fees.
  3. If you are registering a business name that is exactly the same as an existing company’s name, then only that company can register the business name (as it is already considered “taken” to ASIC) – this can save on registration fees as you may not need to register the business name.

If you are already trading, chances are you already have a business name registered. You can either use this name to register your new company (see article Can I set up a company with the same name as a registered business name?) or you can transfer the business name to the company’s ABN once obtained

What is a shelf company?

A shelf company is one that has been incorporated, and has been sitting on the “shelf” for a certain amount of time without trading or holding any assets or liabilities. This was common practice prior to the inception of online registration, as registering a company then was time consuming and difficult – it was simply much easier to “purchase off the shelf”. Nowadays, with such a streamlined process and the ability to register a company instantly online, there is generally no need to acquire a shelf company.

Fun fact: the original owner of Patricia Holdings pioneered the shelf company concept back in 1968. We are now one of the leading companies to forge this online registration platform and continue to be a leader 50 years on.

How do I register a foreign company in Australia?

An entity must be registered with ASIC to carry on business in Australia if it meets the definition of a “foreign company” in Section 9 of the Corporations Act 2001. A foreign company is defined as a body corporate which has been incorporated in an external territory or outside Australia, or an unincorporated body that is formed in an external territory or outside Australia and may sue and be sued or may hold property in the name of its secretary or other officer.

In order to register your foreign company in Australia, there are a few steps which must be followed.  Firstly you must ensure that the name you wish to use is available. Next, you must complete and submit a Form 402 – Application for Registration as a Foreign Company, along with the required supporting documents and the applicable fees.

Documents that must be lodged with the Form 402 are:

  1. a Certified copy of the Certificate of Incorporation or similar document and a Certified copy of the body's Constitution, including any amendments (which are not more than 3 months old);
  2. a memorandum of appointment of the local agent or power of attorney in favour of the local agent which can be done using an ASIC Form 418. The form must state the name, address and appointment date of the local agent who must be an Australian individual or company, authorised to accept, on behalf of the foreign company, service of process and notices.
    Note: if the Form 418 is being lodged by a third party on behalf of the company, a copy of the document which authorises them to lodge the document must be provided as well as a Form 403 to verify the authorising document; and
  3. a memorandum stating the powers of certain directors where the directors of the foreign company include directors who are resident in Australia and are members of a local board of directors.

Who can be a director of an Australian company?

In order to be a director of an Australian company, there are a few minimum requirements that must be met. The person applying to be a director must:

  1. be 18 years of age;
  2. have provided written consent to taking on the role and the responsibilities of being a director prior to being appointed; and
  3. not have otherwise been disqualified from being a director.

An individual will be disqualified from being a director if they:

  1. are an undischarged bankrupt;
  2. have entered into a personal insolvency agreement under the Bankruptcy Act 1966 and have failed to fulfil the terms;
  3. have been banned by ASIC or a court from managing corporations; or
  4. have been convicted of dishonesty-related offences.

Who cannot be a director of an Australian company?

An individual will be disqualified from being a director if they:

  1. are an undischarged bankrupt;
  2. have entered into a personal insolvency agreement under the Bankruptcy Act 1966 and have failed to fulfil the terms;
  3. have been banned by ASIC or a court from managing corporations; or
  4. have been convicted of dishonesty-related offences.

If an individual is already a director in a corporation and then becomes subject to one of the above four categories, they will be automatically disqualified and removed from any directorship they currently occupy by ASIC.

Can a foreigner be a director of a company in Australia?

Yes, a foreign person can be a director of a company in Australia, however they cannot be a sole director of an Australian company. Section 201A of the Corporations Act 2001 sets out the minimum number of directors, including the minimum number of Australian directors that a company must have. It states that a private pty ltd company must have at least one director, who must ordinarily reside in Australia. A public company must have at least three directors and at least two directors who ordinarily reside in Australia.

Can a non-resident open a company in Australia?

A non-resident can start a company in Australia, however they cannot do it on their own. In Australia, at least one director of any company must be an Australian resident, two of the minimum three directors of a Public company must be Australian residents. This means that a non-resident cannot open a company on their own; however they can do so in partnership with an Australian resident.

Can I be a company director if I’m not an Australian Citizen?

Yes you can be, however you cannot be a sole director of a company – you must have at least one resident director for Australian companies (or two if the company is a Public company; minimum three directors in total)

Can a temporary resident be a director of an Australian company?

Yes an individual of any nationality or residency can be a director of an Australian company however you should be aware of Section 201A of the Corporations Act 2001 which states that a proprietary company must have at least one director that ordinarily resides in Australia, and in a public company, at least two of the minimum three Directors must reside in Australia.

Can a foreign citizen start a business in Australia?

Yes, a foreign citizen can start a business in Australia. If the business is run as a company structure, due to the minimum requirements for directors, there will need to be at least one Australian resident involved as a director of the company.

If you are a foreign citizen wanting to register a company and do not meet the minimum director requirements, get in contact with us and see how we may be able to help. See: https://www.patricia.com.au/other-services/australian-resident-director.

How much does it cost to set up a company in Australia?

As at the 1st of July 2021, the ASIC fees for company registration changed, and are currently as follows:

  • $512 for a Standard Pty Ltd companies, Superannuation Trustee Companies, Home Unit Companies, Not-for-profit Pty Ltd Companies and Public Companies
  • $422 for companies Limited by Guarantee

These fees described above are ASIC fees only, and do not include our service fees – if you would like to see full pricing information please visit this link.

What would be the upside to having multiple classes of shares in my company constitution?

In our multi-class constitutions, each different class of share is assigned a different set of rights and restrictions. This would be useful in a company where there are different tiers within the shareholders, as it allows certain shareholders to hold voting rights, whereas others only hold rights to dividends and so on.

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