The Australian market offers small and medium-sized companies to the people living in Australia as well as in abroad to set-up or expands their businesses. The setting, expanding, and register a company in Australia are difficult tasks for many reasons. Starting with the distance and the time difference (If you are not an Australian resident), the different business practices with the limited knowledge of the local market conditions, these are some major challenges that you will have to face in Australia. Let’s discuss ten common challenges you will face in case you register a company in Australia.

1. Business entity profile

You can only be incorporated in Australia through individuals, partnerships, trusts, joint ventures, or as a company. If you are an outsider company, you must set up a wholly-owned subsidiary in Australia if you wish to do business there.

2. Formation of your business

If you are running a foreign company, you can establish subsidiaries in Australia in two ways:

• directly registered in Australia

• Establish a new company, or acquire a newly established but not open shell company.

For starting-up your company in Australia, you need to get registered with the Australian Securities and Investments Commission (ASIC).

The Australian Government's Companies Act 2001 (The Corporations Act 2001) requires a company to be:

• Unlimited Liability Company

• Corporation

• Guarantee Company

• "No liability" (though this form only applies to mining or mining-related Business Company).

The most common corporate entity in Australia is a corporation. A company limited by shares is divided into private companies and public limited companies.

3. Challenges in establishing a private limited company

A private limited company is usually a private company or a subsidiary of a public limited company. To classify a private limited company as a large private limited company or a small private limited company, there are several standards that you need to meet.

If your company is in loss, the liability of the shareholders is limited to the amount of the shares outstanding, such as

• Non-employee shareholders must not exceed 50

• Fundraising activities

• There should be at least one director who must be an Australian resident

• In the business name, there must be "Pty Ltd" or "Proprietary Limited”.

• Unique 9-digit company code will be allocated to Australian established companies.

You can consider the private limited company as a large only if any two of the following three criteria are met.

• During the financial year, the combined turnover of the business and its entities in control should reach $25 million or more.

• At the end of the fiscal year, the combined total asset value of the business and its entities reached $ 12.5 million or more.

• At the end of the fiscal year, including the entities, the company should have 50 or more employees.

If a private limited company cannot meet two of the above three criteria, it is considered as a small private limited company.

4. Challenges in establishing a public limited company

• Usually used by larger public companies

• Countless number of shareholders/members

• It should have at least three total directors, among whom two should be Australian residents

• At least one company secretary based in Australia

• Issuance of the prospectus should be according to the law

• Listed on the Australian Securities Exchange

• “Ltd” should be written along with the company name of a public limited company

5. Australian branch for overseas companies

 

If your company is established overseas and you wish to incorporate financial results in Australia, you need a branch in Australia, instead of a subsidiary. Moreover, for establishing a branch in Australia, you must register your company as foreign companies in accordance with the Company Law.

• You must file your foreign company with the Australian Securities and Investments Commission (ASIC)

• An application form, a copy of the company's existing business license and other designated documents

• You will also need to register for an office in Australia and assign this job to a local agent.

• When registering, your foreign company will get an "Australian Registrar Code"(ARBN).

• Once registered, your branch must submit the annual accounts of the foreign company and comply with other reporting requirements.

6. Expansion of business towards Australia

With the establishment of a business presence, you need to move step by step to establish yourself in Australia. To build up and expand your business –You may face many challenges, such as managing financial expenditures, knowing about the expectations of Australian customers and business partners, etc. Besides, the registration process of your company as per Australian government rules and regulations is itself a difficult task.

7. Challenges in the registration of the company

Registration of the company with your chosen name is the first thing when you build up your business. In Australia, you need to register your business by the Australian Securities and Investments Commission (ASIC). However, choosing your company name is very challenging for which you have to be vigilant.

You cannot choose the name for your company if any other company is already registered by the same name. In accordance with the company law system, duplicate name in business registration is illegal as:

• Violation of the Competition and Consumer Law 2010

• "Misleading and Deceptive Conduct", "False Statements"

• Legal principles in "counterfeiting."

8. Australian customers’ expectations

Knowing about your customers' expectation with the product, your company sales is the biggest challenge. Turnover and growth of your company depend on the quality customers you have. Therefore, it is important to maintain the quality of your products according to the Australian customers’ expectations.

9. Hiring the right employees

It is important for every business to hire staff. It really matters whether you have hired the staff exactly as per your need. It makes a difference if you hire the appropriate human resource, and it becomes a challenge when seeking around the masterpieces with the field. It affects your operational and managerial growth. Therefore, it is recommended to wait and continue the recruiting process until you find the right candidate for the position you offer. Australia is a country where the literacy rate is comparatively higher than many other countries. The candidates may ask you for handsome salaries.

10. Corporate loans

Corporate loans can be a critical part of growth. It is very difficult to maintain and manage the financial expenditure without sufficient funds. Therefore, in case of financial support for various projects, business loans help. Many businessmen completely rely upon and invest in projects depending on business loans. Even they have sufficient fund, they pursue loans instead of investing their own money. This allows them to maintain the company fund to lower their risk. However, getting a business loan can be challenging since it requires a certain profile. On the other hand, loans also lead to minimizing profit.

Conclusion

Doing business in Australia has become easier than ever before, for both investors and entrepreneur. You just need to get yourself prepared for the challenges. Perhaps, these pieces of challenges we have described above will give a kick-start. Keep in mind, it takes a little harder to start, but it is not so difficult at all.