How to open a company in Australia
Monica Makari
Published by Monica Makari at How to…books at Smashwords
November 2011
Copyright 2011 Monica Makari
Smashwords Edition, License Notes
This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.
Discover other titles by Monica Makari at How to…books by visiting http://www.jobinaustralia.info
How to find a job in Australia
How to drive in Australia
How to do banking in Australia
How to settle in Australia
How to study in Australia
How to apply for a visa in Australia
Slang in Australia
How to open a company in Australia
Contents
Initial decision
Cover the basics
Currency in Australia
Time zones
Gross Domestic Product GDP
Australian economy - statistics
Where to start
First steps
Types of businesses
Business structures
Important issues
Establish your company
Register your business name
Register your company
Register your ACN
Register your ABN
Register your domain name
Register your trade mark
Register your GST
Register your FTB
Register your PAYG
Register your TFN
Register your pay-roll tax
Additional information
Operational issues
Finances
Insurance
OH&S
Taxes
Business culture
Employing staff
Planning a business exit
Selling your business
Succession planning
Deregister your company
Wind up your company
Bankruptcy and insolvency
Additional support
Market research
Establishment
Investment planning
Final advice
Glossary
About author
Initial decision
So, you decided to start your own business in Australia… Does any of the following describe you?
Would you like to be your own boss?
Do you have an excellent product or service you know it’ll work?
Are you representing a company ready to introduce its products to Australian market?
Can you do a better job than your current boss?
Do you want more freedom and control over your life?
Did you just moved to Australia and see many opportunities?
Whatever your reason is, you need to get informed and make sure you understand what having your own business entails – both positives and negatives.
Although there are many things to be considered when planning your own business, opening a company is much simpler and faster process in Australia than in many other developed countries - I’m sure you will have a clear idea of whether opening your own business is for you after reading this book.
Running your own business – be it a home based, organisation with many employees, franchise or a mobile service – can be extremely rewarding. It also requires commitment, a great deal of motivation, self-initiative and time management skills.
95% of private sector entities in Australia are small businesses with up to 100 employees (if manufacturer) or up to 20 (if non-manufacturer) and this is what our focus will be in this publication.
By following all steps you will not only have a legal entity suitable for your needs, but also instruments to build successful base for your future dealings with your clients, suppliers, government agencies and other businesses.
This book will help you understand everything you need to know about setting up your own business in Australia, steps you need to take and even exit strategies from legal and practical point of view, and by the end of it, you will be reassured about your decision.
If you decide to proceed and don’t know where to start or who to trust, you can always contact the author for details of specialists featured in this book or those practicing in the city/region of your choice for initial advice.
Doing business in Australia is refreshing, rewarding and fun experience and I sincerely hope you enjoy personal and professional growth your own business brings!
Cover the basics
Currency in Australia
Time zones
Gross Domestic Product – GDP
Australian economy – statistics
Before you start setting up your business, get sufficient information on where to position your service or product on the market and what the basic facts are. This way you will be fully prepared for next steps and subsequent success of your business venture.
In June 2007 there were 2,011,770 actively trading businesses in Australia.
Since 2007 the number of businesses in Australia stayed at around 2 million mark with slight increases.
Between financial years 2003-04 and 2005-06, the growth was a bit slower although there was a significant increase in the growth rate of businesses in 2006-07 and is generally about 2% per year. Number of businesses can be compared to GDP - 3.2% in 2006-2007 and increase to Australia’s by 1.5% in the same period.
There were 1,868,969 businesses operating in June 2003 and out of those, 58% were still operating in June 2007. Remaining 777,106 businesses exited the market by 2006-2007 and these numbers, combined with additional business statistics show that business survival is related to the age of a business meaning that the longer a business survives, the greater its chances of continuing operation.
General numbers over the years show that about 50% of businesses are non-employing (owner operated) operations, about 25% are those with 1-4 employees while the businesses with 5-19 employees are about 10% and large operations with over 200 employees are about 2.5% of all actively operating businesses in Australia. Highest growth in observed in those large (over 200 employees) and small businesses with 1-4 employees.
Large businesses employ a bit less than 30% of the Australian working population, about 50% is employed in businesses with 5-99 employees and the remaining 20% of employees are working spread in the other businesses.
*Note: Above numbers exclude public trading and general government entities as well as businesses in the agriculture, fishing and forestry industries.
Source: Small business in Australia (2011)
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Interesting facts…
Information about small business operators:
-Currently, there are about 1.7 million small business owners
-About 68% are male and 32% are female
-Around 60% are between 30 and 50 years old, 10% are aged less than 30
-70% of small business owners work full-time (35 or more per week) and 30% operates business on a part-time base (less than 35 hours weekly)
-About 80% of male owners work full-time while about 40% of female operators work full-time
-About 70% of small business owners are Australian born while the remaining 30% are born overseas with same proportion for males and females
-90% operate one business, about 7% run two businesses and 3% of small business owners operate three or more businesses
Source: Characteristics of Small Business Operators (COSBO) survey
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Above numbers give you basic indicators of businesses in Australia pointing to the fact that Australian economy relies largely on small business operators. Further in the book we will explore industries and provide more relevant information that you can use when conducting your business plan and market research.
Top 10 biggest companies in Australia are currently as follows:
NAB (National Australia Bank)
BHP Billiton (mining, resources)
Commonwealth Bank of Australia
Rio Tinto Group (mining, resources)
ANZ (Australia & New Zealand Banking Group)
Westpac Banking
Telstra Corporation (communications)
Westfield Group (retail)
Woolworths (retail)
Coles Myer (retail)
CURRENCY IN AUSTRALIA
You most likely already know that the official currency in Australia is Australian Dollar – AUD$. Any trading or business in Australia will generally be done in Australian dollars so you need to be aware of the value of local currency. Check www.xe.com for daily official rates.
In 1913 first Australian notes were issued based on British system of pence, shilling and pound. Australia started transition to decimal monetary system in 1963 and Australian dollar has been introduced on 14 February 1966.
Australia was the first country in the world to have a complete system of bank notes made from plastic (polymer) providing greater security against counterfeiting and misuse, besides the fact that bank notes are washable. These note last four times as long as widely used paper (fibrous) notes.
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Interesting facts…
If you forget Australian bank notes in the pocket and happily proceed with washing your clothes, the money will come out untouched!
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This innovative technology was developed entirely in Australia and introduced in 1988 after large number of counterfeited 10 dollar notes. Polymer guarantees additional cleanliness and is easily recyclable. Australia’s currency comprises coins of 5, 10, 20 and 50 cent with 1 and 2 dollar denominations, created by the Queen’s official jeweller Stuart Devlin, as well as notes of 5, 10, 20, 50 and 100 dollar denominations.
Australia’s notes are printed in Australia, where print polymer bank are printed for other countries such as Bangladesh, Brunei, Chile, Indonesia, Kuwait, Malaysia, Mexico, Nepal, New Zealand, Papua New Guinea, Romania, Western Samoa, Singapore, Solomon Islands, Sri Lanka, Thailand and Vietnam.
Australia’s notes features
$100 note
-world-renowned soprano Dame Nellie Melba (1861–1931)
-distinguished soldier, engineer and administrator General Sir John Monash (1865–1931)
$50 note
-Aboriginal writer and inventor David Unaipon (1872–1967)
-Australia’s first female parliamentarian, Edith Cowan (1861–1932)
$20 note
-Mary Reibey (1777–1855), who arrived in Australia as a convict in 1792 and went on to become a successful shipping magnate and philanthropist
-founder of the world’s first aerial medical service (the Royal Flying Doctor Service), the Reverend John Flynn (1880–1951)
$10 note
-the poet AB ‘Banjo’ Paterson (1864–1941)
-Dame Mary Gilmore (1865–1962) with micro-printed excerpts of Paterson’s and Gilmore’s work
$5 note
-Her Majesty Queen Elizabeth II
-Parliament House in Canberra, the national capital
Australia’s coins features
$2 coin
introduced in 1988 two dollar note
an Aboriginal tribal elder witha background of the Southern Cross and native grasstrees
$1 coin
-introduced in 1984 replacing one dollar note
-five kangaroos
50 cent
-Australia’s coat of arms: the six state badges on a shield supported by a kangaroo and an emu
-background of Mitchell grass
20 cent
-platypus, one of only two egg-laying mammals in the world
10 cent
-male lyrebird dancing inhabiting the dense, damp forests of Australia’s eastern coast
5 cent
-echidna, or spiny anteater, the world’s only other egg-laying mammal
Australia’s coins are produced by the Royal Australian Mint, which is located in the nation’s capital, Canberra. Since opening in 1965, the Mint has produced more than 14 billion circulating coins, and has the capacity to produce more than two million coins per day, or more than 600 million coins per year. The Royal Australian Mint has an international reputation for producing quality numismatic coins, and won an international award for ‘Best Silver Coin 2006’ for its Silver Kangaroo coin design.
TIME ZONES
Before starting a business in Australia and making your first phone calls to your potential Australian partners or collaborators, you will need to calculate the time difference – it still happens that phone calls to local companies are made during night time in Australia!
Being the world’s sixth largest country with a land mass close to 7.7 million square kilometres, Australia is divided into three separate time zones. Again, it is good to check where your contacts are located before making or expecting a phone call.
Australian Eastern Standard Time (AEST)
Eastern states of Queensland, New South Wales (with the exception of the town of Broken Hill), Victoria, Tasmania and the Australian Capital Territory. AEST is equal to Coordinated Universal Time plus 10 hours (UTC +10).
Australian Central Standard Time (ACST)
South Australia, the town of Broken Hill in western New South Wales and the Northern Territory. ACST is equal to Coordinated Universal Time plus 9 ½ hours (UTC +9 ½).
Australian Western Standard Time (AWST)
Western Australia. AWST is equal to Coordinated Universal Time plus 8 hours (UTC +8).
Daylight saving
When talking about the time zones and calculating time difference, you also need to consider daylight Saving Time (DST) - the practice of advancing clocks one hour during the warmer months of the year. DST starts at 2am (AEST) on the first Sunday in October and ends at 2am (AEST) (which is 3am Australian Eastern Daylight Time) on the first Sunday in April.
In Australia, daylight saving practice is used in New South Wales, Victoria, South Australia, Tasmania, and the Australian Capital Territory, while Queensland, the Northern Territory and Western Australia don’t move the clocks at all. This sometimes requires a certain level of adapting (and confusion), especially in areas bordering on two different states such as Queensland and New South Wales with workers and students commuting daily between the states.
GROSS DOMESTIC PRODUCT – GDP
What does GDP refer to?
It is defined as the total market value of all the finished goods and services produced within a country's borders in a specific time period – usually in a calendar year. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory. An example of a difference between GDP and GNP (Gross National Product): a Japanese-owned automobile factory in the US counts in US GDP but in Japanese GNP.
Before investing in a foreign country, GDP will be one of the indicators of the general financial health of major industries and households as well as spending power for your product or service. The following table will assist you by comparing Australian and your country’s economies.
GDP per capita in US$ - top 50 countries (as per CIA Factbook in January 2011)
1 Qatar 179,000
2 Liechtenstein 141,100
3 Luxembourg 82,600
4 Bermuda 69,900
5 Singapore 62,100
6 Jersey 57,000
7 Norway 54,600
8 Brunei 51,600
9 United Arab Emirates 49,600
10 Kuwait 48,900
11 United States 47,200
12 Andorra 46,700
13 Hong Kong 45,900
14 Guernsey 44,600
15 Cayman Islands 43,800
16 Gibraltar 43,000
17 Switzerland 42,600
18 Australia 41,000
19 Austria 40,400
20 Bahrain 40,300
21 Netherlands 40,300
22 Canada 39,400
23 Sweden 39,100
24 British Virgin Islands 38,500
25 Iceland 38,300
26 Belgium 37,800
27 Ireland 37,300
28 Equatorial Guinea 36,600
29 Denmark 36,600
30 Greenland 36,500
31 San Marino 36,200
32 Taiwan 35,700
33 Germany 35,700
34 Finland 35,400
35 Falkland Islands 35,400
36 Isle of Man 35,000
37 United Kingdom 34,800
38 Japan 34,000
39 France 33,100
40 Macau 33,000
41 Faroe Islands 32,900
42 Italy 30,500
43 Monaco 30,000
44 Korea, South 30,000
45 Israel 29,800
46 Greece 29,600
47 Spain 29,400
48 Bahamas, The 28,700
49 Slovenia 28,200
50 New Zealand 27,700
GDP is the measure adopted in 1991 by the United States economy and is calculated as follows:
GDP = C + G + I + NX
Note:
C is equal to all private consumption or consumer spending in a nation's economy
G is the sum of government spending
I is the sum of all the country's businesses spending on capital
NX is the nation's total net exports, calculated as total exports minus total imports (NX = Exports - Imports)
AUSTRALIAN ECONOMY – STATISTICS
When placing a product in a market, it is very helpful to have a good insight into the sectors of local national economy that may affect placement of your product and potential for further growth and business success.
While Gross Domestic Product or GDP table gives you a general picture of a country’s economy, the Consumer Price Index or CPI is the measure used to record quarterly changes in the price of a basket of goods and services which account for a high proportion of expenditure by the CPI population group – generally in metropolitan households in major cities). Major popular newspapers in most countries regularly publish cost of daily basket with most widely used products and services.
This basket covers a wide range of goods and services, arranged in the following eleven groups that are further explained:
Food
Alcohol and tobacco
Clothing and footwear
Housing
Household contents and services
Health
Transportation
Communication
Recreation
Education
Financial and insurance services
The following table shows change relating to all 11 groups, as recorded between June 2010 and June 2011 in Australian capital cities:
