A company is a separate legal entity and is registered with ASIC – Australian Security and Investment Commission. This form can be used to register a company in Australia.
The major differences between a company and a business:
1. A company name can be used Australia-wide once it is registered. It is registered with federal government. A business name is registered with state government and only effective in one state – you have to register with each state authority if you want to use a business name nationally.
2. A company is a legal entity. A business is not but the proprietor(s) must be a legal entity or legal entities. – In most case, shareholders of a company will only have limited liabilities (limited by their share) but individual business owners may have unlimited liabilities to a business.
3. Different tax rate. Income tax rate for a company is flat – 30% at the moment. Income tax rate for a sole-trader business is same as the rate for an individual which is from 0, 15% to 47% progressively. The rates will vary each year.
4. The application fee for a company is around $400 and an annual return fee of $220 is applied each year. The application fee for a business name is $137 for a three-year period and then a renewal fee is applied for every three years.
5. Only a company can use “Pty Ltd” or “Ltd” in the end of the name.
