Corporate compliance requirements for Australian companies.

Meeting corporate compliance requirements is a fundamental responsibility for companies operating in Australia. These requirements, from initial registration to maintaining financial records, help businesses operate within a regulated framework and adhere to Australia’s laws and regulations.

This guide provides an overview of the key corporate compliance obligations for companies in Australia. These include company set-up requirements, ongoing business compliance, accounting and tax requirements, and employment law requirements.

Company set up requirements in Australia

Company and business name

The corporate regulator, the Australian Securities and Investments Commission (ASIC), maintains a register of Australian companies and business names. You can search for a name on their website.

Director(s)

Proprietary limited (Pty Ltd) companies must have at least one Australian resident as a director. Public companies (ending in Limited or Ltd) must have two directors who are Australian residents.

Section 201B of the Corporations Act 2001 states that a director can be any individual who is:

• At least 18 years of age
• Not disqualified from managing corporations unless leave is granted by ASIC (under s206F(5)) or by a court (under s206G)

Disclosing personal details of directors

Companies must inform the ASIC of the directors’ names, dates of birth, and current residential addresses.

Company record

Companies are required to maintain an up-to-date register of members and officeholders, as well as minutes of meetings, including circulating resolutions.

Registered office

All Australian companies need a registered office.

This is the company’s official address, where correspondence is sent from the ASIC, the Australian Taxation Office (ATO), and other regulatory bodies. It is also used for the legal service of documents.

The registered office address can be different from the operational address and is often located at the offices of lawyers or accountants.

Principal place of business

The principal place of business address is the operating or trading location of the business.

This address can be the same as the registered office and is typically where correspondence to and from suppliers and customers is regularly set.

Number of shares

There is no minimum number of shares that a company is required to issue.

Consideration should be given to matters including:

• Plans to raise further capital and its price
• The number of shareholders
• The amount of share capital expected upon incorporation; for example, if you issue 1 million shares at AUD 1.00 on incorporation, the company expects to receive a capital injection of AUD 1 million

Company constitution

A company will be governed by either:

1. Replaceable rules
2. A constitution
3. A combination of both

A constitution must govern the following types of companies:

• ‘No Liability’ public companies
• Special purpose companies

Replaceable rules

If a company does not adopt a constitution, it can use the Replaceable Rules instead. Replaceable Rules appear in the Corporations Act and provide basic rules for governing a company.

Replaceable Rules do not apply where a company’s sole director and shareholder are the same person.

A detailed article showing the interaction between the constitution and the replaceable rules appears on the ASIC website.

Public officer

A public officer is a company’s representative for the ATO and is responsible for the company’s obligations under section 252 of the Income Tax Assessment Act 1936, which cover the entity’s tax affairs, such as record keeping and submitting company returns.

A public officer must be an individual who meets all the following criteria:

• Be at least 18 years old or over
• Ordinarily resides in Australia
• Understands the nature of the appointment

Tax file number

A tax file number (TFN) is obtained simultaneously with an Australian Business Number (ABN) using the same application form. This can be done through the Australian Business Register (ABR).

Australian company number

A company is issued a unique, nine-digit number upon registering the business. This unique number is an Australian Company Number (ACN) and must be displayed on all company documents.

Australian business number

An ABN is a unique number used to identify business names and companies, as well as various taxes and other business purposes. Issued by the ABR, an ABN is generally comprised of your ACN with a two-digit prefix.

With an ABN, you can:

• Confirm the identity of the business to others when ordering and invoicing
• Avoid Pay as You Go (PAYG) tax on payments received
• Claim Goods and Services Tax (GST) credits
• Obtain an Australian domain name

Australian registered body number

An Australian Registered Body Number (ARBN) is a unique, nine-digit number allocated by ASIC when a body is registered with them other than as a company. Foreign companies wishing to register with ASIC will receive an ARBN instead of an ACN.

A body that has been issued with an ARBN can apply for an ABN.

Display of company name and ACN

Companies must display their name at all operational locations accessible to the public. Public companies must also display their name with the words registered office at their registered office.

The company’s name and ACN must be displayed on the first page of the documents.

The ACN must be displayed in the following:

• Documents lodged with the ASIC
• Statements of account, including invoices and quotes
• Receipts (not machine-generated)
• Business letterheads
• Official company notices
• Cheques, promissory notes and bills of exchange
• Written advertisements making a special offer

If a company has an ABN, it can be used in place of the ACN.

Business licenses and permits

Specific business licenses and permits are required for certain business activities in Australia.

The types of licenses and permits needed depend on the following:

• Business type
• Business activity
• Location

Ongoing business compliance requirements for companies in Australia

Notification of changes

Companies must notify ASIC if the following changes are made:

• Company name (within 14 days of the change)
• Company details, e.g., registered office or principal place of business (within 28 days of the change, or 14 days in the case of public companies)
• Company constitution (within 28 days of the change)
• Directors’ details: names, addresses, new appointments or resignations (within 28 days of the change)
• Share structure or shareholder details (usually within 28 days of the change)

Annual general meeting

Public companies must hold an annual general meeting at least once every year and within five months after the end of its financial year.

Accounting and tax compliance requirements for companies in Australia

Keeping financial records

Companies must maintain up-to-date financial records that accurately record and explain their financial position. Larger companies have additional obligations to lodge financial reports with the ASIC and must retain these records for seven years.

The financial records consist of:

• Statement of profit or loss
• Statement of financial position (balance sheet)
• Statement of changes in equity
• Statement of cash flow

Annual financial reports

Large proprietary companies must prepare annual financial reports that are:

• Prepared in accordance with Chapter 2M of the Corporations Act 2001
• Audited
• Lodged with ASIC within four months of the financial year-end
• Sent to members within four months of the financial year-end

Date of the financial year-end

The financial year in Australia starts on 1 July and ends on 30 June of the following year.

Goods and Services Tax (GST) registration

GST registration is mandatory for businesses in Australia that surpass a specific annual turnover threshold. The process enables the collection of GST on sales and the claiming of GST credits on business purchases. Resources and a GST registration tool are available on the Australian Taxation Office (ATO) website.

Appointment of an auditor

According to the Corporations Act, directors of a proprietary company may appoint an auditor if the company has yet to appoint the auditor in a general meeting.

Public companies must appoint an auditor within one month of registration unless the company has appointed an auditor at the general meeting.

Income tax return

Individuals and businesses are required to submit their annual income tax returns to the ATO.

Employment law requirements

Annual leave

Full-time and part-time employees in Australia are entitled to four weeks of annual leave, and employees who work in shifts are entitled to five weeks.

Sick and carer’s leave

Employees are entitled to sick and carer’s leave when:

• They are sick
• They are injured
• A family member is injured
• A family member needs help during emergencies

The entitled paid sick and carer’s leave in Australia is ten days for full-time employees and pro-rata for part-time employees.

Family and domestic violence leave

All employees, including casual and part-time employees, are entitled to five days of unpaid family and domestic violence leave every year.

Employees may take family and domestic violence leave to deal with the following:

• Attending court hearings
• Accessing police services
• Making arrangements for safety, such as relocation

Compassionate and bereavement leave

All employees, including casual employees, are entitled to two days of compassionate leave when a family member dies or suffers a life-threatening injury or illness.

Maternity and parental leave

Employees are entitled to up to 12 months of unpaid parental leave and can request an additional 12 months of leave.

Employees can also receive Parental Leave Pay (PLP), which is funded by the Australian government, and paid parental leave from their employer. Employees who receive PLP are still entitled to unpaid parental leave.

Employees can receive up to 22 weeks of PLP at the national minimum wage. They can claim PLP for one continuous period, multiple smaller blocks, single days, or combined single days. The leave can be taken flexibly as negotiated between the employer and employee.

Conclusion

Understanding Australia’s corporate regulations while maintaining compliance is essential for any business considering expansion in the region. Staying informed about local regulations will allow companies to maximise the benefits of these initiatives, maintain smooth operations, and minimise the risk of penalties. Consulting with experts is recommended to handle each of the stages of business operation in the Australian market.

How Acclime can help navigate Australia’s compliance requirements

Acclime Australia provides tailored corporate compliance solutions that support your business in meeting Australia’s regulatory requirements. Our team offers expert assistance with all aspects of compliance, from company registration to ongoing legal obligations.

From implementing tax reporting systems to managing payroll processes, Acclime supports your company complies with corporate, tax, and employment regulations, allowing you to focus on confidently operating in the Australian market.