Steps to Set Up a Company in Australia: A Complete Step-by-Step Guide

Starting a company in Australia involves a series of essential steps, from selecting the right business structure to completing all necessary registrations. Whether you’re planning to register your business yourself or simply want to understand the process before seeking professional help, this guide provides a detailed walkthrough of each step, practical tips, and common pitfalls to avoid.

Steps to starting an business

Introduction: Steps to set up a company

Starting a company in Australia requires careful planning and following the correct legal steps. Even small mistakes in registration or compliance can lead to delays or penalties. Below, you’ll find a detailed step-by-step guide outlining everything you need to do to set up your business smoothly and confidently.

Step 1: Decide on Your Business Structure

Before you start registering your company, it’s essential to decide on the right business structure. Your choice affects your tax obligations, legal liability, and compliance requirements. While this guide doesn’t go into all the details of each structure, the main options include:

• Sole Trader – simple setup, personal liability.

• Partnership – shared responsibility, tax passed to partners.

• Pty Ltd Company – limited liability, suitable for most small to medium businesses.

• Trust – more complex, often used for asset protection and tax planning.

Why choose a structure first?

Selecting the correct structure early avoids costly changes later and ensures you meet ASIC and tax compliance requirements from day one.

Tip: For a full comparison of company types in Australia, see our guide → Types of Companies in Australia.

Step 2: Choose a Company Name

Once your business structure is decided, you need to pick a company name. Your name represents your brand, so it’s important to check it carefully.

choose a company name

Checking availability:

• Visit the ASIC website and search the company name register.

• Make sure your desired name isn’t already in use or too similar to an existing company.

Name rules to remember:

• Must not be misleading, offensive, or imply government association.

• Cannot use certain restricted words without permission.

Mini Checklist:

• Unique and easy to remember

• Complies with ASIC rules

• Trademark search completed to avoid conflicts

Pro tip: Reserving your company name online can prevent others from registering it while you prepare documents for ASIC.

Step 3: Appoint Directors & Shareholders

After choosing your business structure and company name, the next step is to appoint your directors and shareholders. This is crucial because ASIC requires accurate personal and company information during registration.

Director requirements:

• Must have a Director ID (obtainable online if you haven’t yet).

• Must provide full name, residential address, date of birth, and contact details.

Shareholders:

• Prepare a list of all shareholders.

• Specify the share allocation for each shareholder.

• Include company secretary details if applicable.

Checklist of documents and info to prepare:

• Director ID

• Proof of identity (e.g., passport or driver licence)

• Residential address

• Date of birth

• Shareholder names and share percentages

Pro tip: Double-check all information before submission to avoid registration delays or errors.

Step 4: Register with ASIC

With your directors, shareholders, and company name ready, you can now register your company online with ASIC.

Register your company online with ASIC.

Step-by-step process:

1. Go to the ASIC online registration portal.

2. Select the company type (typically Pty Ltd for SMEs).

3. Enter company name, ACN (if pre-allocated), office address, and principal place of business.

4. Provide director and shareholder information as prepared.

5. Review and submit the application.

Typical processing times:

• Self-registration: 1–3 days.

• Professional service assistance: 4–24 hours.

Common mistakes to avoid:

• Incorrect Director ID or personal details

• Missing or incomplete shareholder info

• Name conflicts or spelling errors

• Entering an invalid office address

Tip: Keep a copy of your ASIC confirmation and company registration certificate for future steps like opening a business bank account.

Step 5: Apply for ABN, TFN, GST

Once your company is registered with ASIC, the next step is to apply for an Australian Business Number (ABN), Tax File Number (TFN), and GST registration if applicable. This is essential for legal trading, invoicing, and tax compliance.

ABN registration:

• Can be completed online via the Australian Business Registry Services (ABRS).

• Required for all businesses trading in Australia.

TFN registration:

• Every company needs a separate TFN for taxation purposes.

• Usually applied alongside your ABN, but processed separately.

GST registration:

• Only mandatory if your annual turnover is $75,000 or more (or $150,000 for non-profits).

• Can be registered at the same time as your ABN via ABRS.

Checklist for this step:

• ABN application completed

• TFN applied

• GST registered if required

Tip: Keep records of all registration confirmations; these are needed for banking, invoicing, and accounting setup.

Step 6: Set Up Your Business Bank Account

A dedicated business bank account is critical, especially for Pty Ltd companies, to keep company funds separate from personal finances and comply with corporate regulations.

You need to set up your business bank account

Documents typically required to open a business account:

• Certificate of incorporation (from ASIC)

• Australian Company Number (ACN)

• ABN certificate

• Director identification documents (passport or driver licence)

Key points when opening a business account:

• Compare fees and services from multiple banks (online banking, merchant facilities, international transfers).

• Ensure all directors are correctly listed and authorised to operate the account.

• Some banks may require a physical visit or certified documents.

Pro tip: Using a separate account from day one simplifies accounting, payroll, and GST reporting, and avoids potential legal issues with personal vs business funds.

Step 7: Set Up Accounting & Record-Keeping System

After registering your company and opening a business bank account, the next step is to establish a proper accounting and record-keeping system. This is crucial for tax compliance, BAS reporting, and smooth financial management.

Key actions:

• Choose accounting software: Popular options include Xero, MYOB, and QuickBooks. These platforms simplify invoicing, payroll, and GST reporting.

• Record keeping: Maintain all invoices, receipts, and financial documents. This includes sales, purchases, payroll, and super contributions.

• BAS preparation: Your accounting system should support BAS lodgement, including GST collected and paid.

Checklist for this step:

• Accounting software installed and configured

• Invoice templates set up

• Payroll & superannuation tracking established

• BAS reporting workflow planned

Tip: Even for small businesses, separating financial records by type (sales, expenses, super) from day one will save time and reduce errors later.

Step 8: Understand Your Ongoing Compliance

Once your business is operational, it’s important to stay on top of ongoing legal and tax obligations to avoid penalties.

Comply with your tax obligations to avoid penalties

Main compliance responsibilities:

• ASIC Annual Review: Pty Ltd companies must confirm or update company details each year. Failure to comply can lead to deregistration.

• BAS & GST reporting: Submit Business Activity Statements on time if registered for GST.

• Payroll & super obligations: Pay employees correctly and on time, including superannuation contributions.

• Record keeping: Retain financial records for at least 5 years, as required by law.

Common pitfalls to avoid:

• Late BAS submissions

• Incorrect or incomplete payroll calculations

• Ignoring ASIC notifications or annual review requirements

Pro tip: Consider setting reminders or using accounting software alerts to track compliance deadlines and avoid last-minute issues.

Step 9: Register for Additional Taxes (if applicable)

Depending on your business activities and the size of your operation, you may need to register for additional taxes or meet specific reporting obligations beyond ABN, TFN, and GST.

Common additional registrations include:

• Fringe Benefits Tax (FBT): If your company provides non-cash benefits to employees, such as company cars or health insurance, FBT registration may be required.

• Payroll tax: Levied by individual states, this applies once your total wages exceed the threshold in that state. Each state has different rates and reporting rules.

• Industry-specific requirements: Certain industries, like hospitality, construction, or healthcare, may have mandatory reporting or compliance obligations.

Tip: Check the article about Business Licences Australia for detailed guidance on industry-specific compliance and licensing requirements.

Checklist for this step:

• Determine if your business falls under FBT obligations

• Check payroll tax rules in your state

• Review any industry-specific reporting requirements

Step 10: Consider Business Licences & Permits

Some businesses require licences or permits to operate legally. Even if your company is registered, operating without the necessary licences can lead to fines or closure.

You need to check whether your type of business requires a license or not.

Key considerations:

• Industry-specific licences: Examples include food handling licences, building permits, and health services registration.

• Check federal, state, and local requirements: Licensing requirements can differ across jurisdictions.

For a full guide, see the article about Business Licences Australia.

Checklist for this step:

• Identify licences relevant to your industry

• Verify federal, state, and local compliance

• Prepare application documents in advance

Pro tip: Even if a licence is not required immediately, planning ahead can prevent delays in launching your business or offering certain services.

Step 11: Post-Registration Checklist

Once your company is officially registered, there are several essential post-registration tasks to ensure your business runs smoothly. Completing these steps early helps avoid compliance issues and sets up a professional operation.

Key tasks include:

1. Set up a business bank account – Keep your company finances separate from personal accounts. Use your ACN, ABN, and certificate of incorporation when opening the account.

2. Implement an accounting system – Choose accounting software to track invoices, expenses, payroll, BAS, and superannuation obligations.

3. Obtain business insurance – Consider public liability, professional indemnity, and workers’ compensation if you employ staff.

4. Employee setup (if applicable) – Register employees for PAYG withholding, superannuation, and workplace safety compliance.

5. Domain name, website, and business email – Essential if you plan to start an online business; ensures professional communication and online presence.

Checklist for step 11:

• Bank account opened

• Accounting software configured

• Insurance policies obtained

• Employees registered for PAYG & super (if applicable)

• Domain, website, and business email set up

Step 12: Common Mistakes to Avoid

Even with careful planning, there are frequent pitfalls when starting a company. Avoiding these mistakes can save time, money, and legal headaches.

Some common mistakes when starting your own business

Common mistakes include:

• Choosing the wrong business structure – Can lead to higher tax obligations or liability issues.

• Incorrect or incomplete director/shareholder information – Missing Director IDs, wrong dates of birth, or incorrect residential addresses can delay ASIC registration.

• Name conflicts or trademark issues – Ensure your company name is unique, complies with ASIC rules, and does not infringe trademarks.

• Skipping ABN, TFN, or GST registration – May result in penalties or inability to operate legally.

Pro tip: Following a detailed step-by-step checklist helps you avoid common errors and ensures your business is compliant from day one.

Step 13: Common Mistakes to Avoid

Even with careful planning, starting a company can be tricky. Being aware of common mistakes ensures your business remains compliant and avoids delays or penalties.

Frequent pitfalls include:

• Choosing the wrong business structure – This can impact taxation, liability, and future compliance. Always review Types of Companies in Australia before deciding.

• Incomplete or incorrect director/shareholder information – Errors in Director IDs, dates of birth, or residential addresses can result in ASIC rejecting your registration.

• Company name conflicts or trademark issues – Ensure the name is unique, follows ASIC naming rules, and doesn’t infringe any trademarks.

• Skipping ABN, TFN, or GST registration – Can lead to fines and legal complications, especially if you start invoicing or hiring staff.

Pro tip: Use a step-by-step checklist during your registration process to minimise mistakes and avoid common setbacks when setting up your business.

Step 14: Estimated Timeline for Each Step

Knowing how long each stage typically takes helps you plan your step by step starting a business efficiently. These timelines are averages for self-registration; professional services may speed up some steps.

Step	Typical Timeframe
Name check (ASIC)	< 1 day
ASIC company registration	1–3 days self, 4–24 hours via professional service
ABN registration	Same day
TFN registration	Usually same day online
GST registration	Instant if applying with ABN
Business bank account setup	1–3 days
Accounting & record-keeping setup	1 day
Ongoing compliance & reporting setup	Ongoing
Employee setup (if applicable)	1–2 days

These timeframes give you an overview of the first steps to starting a business and help you plan effectively for each stage of opening up a business account, registering taxes, and setting up operations.

Conclusion

Following the steps outlined above makes setting up a company in Australia straightforward. From choosing your business structure to completing registrations and setting up accounts, each step ensures your business starts on a solid legal and financial footing. Carefully following this checklist helps avoid common mistakes and sets you up for smooth operations from day one.

For a full overview of starting a company in Australia, check out our comprehensive guide: Start a Company in Australia.

Ready to get your company up and running? Contact Gordon QC Du & Associates today and set up your business quickly, correctly, and with expert guidance. Start your journey in just 24 hours!