Starting a Company in 5 hours — Hour 1

Choosing a Business Name and Registering a Company

You’ve finally reached the point where you want to set up a company. Perhaps the frustration of working for someone else has reached an emotional tipping point, as you realise you bring in far more consistent value than you are remunerated for. Or maybe you’ve been approached by a client directly to do work for them. It may be that you’ve noticed how well the economy is going and how much demand there is for your services. Quite likely though, it’s a combination of all three. Either way you’re ready to set up your company so you can get started on the road to independence.

Starting a company (in Australia) seems daunting. Perhaps that’s at least one of the reasons you haven’t gone through with it before. It’s not though. And if you have 5 minutes to read this series of articles, I’ll show you the fastest way I know to set-up a company.

Disclaimer: My advice is based on my own personal experience — think of it as a friend advising another friend. I’m not an accountant nor a lawyer, and so you should take this advice as you would from a well intentioned friend. If you feel unsure about anything please supplement it with your own research, and if needed professional advice.

So without further delay, let’s get started!

Step 1 — Decide on a Business Name

Why: You need a Name to register your business with ASIC.

How: Just choose something — don’t waste time on this step, you can always change your name at a later date, companies do it all the time.

Cost: $0

Other thoughts: You’re an engineer and clients know your name — how about just going with “ X Engineering” or “X Professional Consulting”, where “X” is either your first and last name or simply your last name.

Further Reading: If you want to get creative have a read of Hello My Name is Awesome. It’s simple to understand and will only take a few hours to knock over.

Step 2— Register your company

Why: While not every business requires an Australian Business Number (ABN), most clients will require you have one before they will engage you.

How: Register you company online at http://generalstandards.co/au/company-registration/ OR https://www.cleardocs.com/products-asic-company-registration.html.

I registered my company using General Standards who were extremely quick (less than 1 day turn-around), however a friend of mine waited several days.

Cost: $500 — $1000

Other thoughts: First off you may be wondering why I have recommended you set up a company instead of a sole trader or partnership business. There are many reasons but the basic one is that if there is any chance you’re business will grow to more than just you, set up a company (see Further reading below). Don’t overthink it. Another tip is to initially register for annual GST reporting initially as in the first year when you aren’t earning a bunch, this will save you having to prepare quarterly BAS’s. Also if your significant other is going to help run the company you may as well list them as a director. Again this is personal advice so it may be worthwhile seeking advice from your accountant.

You probably also feel like this is a giant step and you now nothing about your responsibilities as a director of a company. It really isn’t complicated. From my experience, if you are reasonably smart, meeting with someone in person to discuss your options will not provide any more clarity than researching it yourself for an hour.

Further Reading: What Business Structure, Your responsibilities as a Company Director, What the heck is Pty Ltd (limited liability)?

Step 3 — The Administrative Tasks

Why: There are a few other little tasks you need to do, to make sure you are on top of a few of your responsibilities as a director.

How:

• Keep copies of your Company Documents, signed by all directors, at your Registered Office — which is probably your home at this point. You will receive the relevant documents in the mail, a few days after registering your company.
• Write down your ABN, ACN, ASIC Key and Corporate Key, which will all come in the the mail. You will need these to manage your company details online at http://asic.gov.au/. I like to save this information in Evernote.
• Keep your details up-to-date at http://asic.gov.au/. This is one of your responsibilities as a director.

Coming up: Hour 2 — Accounting and Email.

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