Launching Your Startup: Starting a Business in Australia.
UNSW Founders Insights from a Sleek Workshop.
Starting a business is a challenging journey, but with the right guidance and tools, it becomes much more manageable. Sleek is dedicated to simplifying this process. Presented by Daniel Spencer from Sleek who ran a workshop for the UNSW community.
We’ve captured the highlight for you as well as a cheeky discount code, so keep reading!
“Australia's entrepreneurial spirit is thriving, with around 20,000 new companies being registered every month, primarily in NSW and VIC.”
Daniel Spencer
Starting an Australian Company
To launch a company, it's crucial to choose the right legal structure, as this decision impacts your tax obligations, personal liabilities, asset protection, and reporting requirements. The four main business structures are:
What do you need to start your company in Australia?
At least $1 AUD.
At least one local Australian resident who is an owner of the company (shareholder).
A Company Secretary, Sleek can help you with it.
At least one local Australian resident Local registered business address in Australia. And Sleek can also provide theirs keeping your personal address private.
An Australian bank account for the business.
BONUS> if you are a Director, or thinking on becoming one, make sure you register and get your Director's ID, you will need that number to start your company.
Key Considerations when starting your business
Check your name availability on ASIC, Note: if someone else has the name registered, you can’t use it!
For the ATO Business Activity code the advice is to choose a broad one, it will allow you to expand.
Do you need any Licenses or Permits? Visit ABLIS.gov
Where will you open your bank account? Sleek recommends Airwallex
Where will you work from? Home office is possible.
What insurance may you need? Sleek recommends Upcover
What other legal agreements may you need? Most common ones are shareholders, directors or ESOP agreements
Can you benefit from grants or funding? Sleek’s go to’s R&D tax Incentives and EMDG Austrade Development Grants.
BONUS> Cake Equityand Open Source VC
Common Structure for Startups
A popular structure involves founders directly investing in an operating company (PTY LTD), which holds all Intellectual Property (IP). Future investors also invest directly into the operating company.
Benefits: Easy setup with low compliance requirements. It provides the protection associated with the PTY LTD structure.
Drawbacks: This setup has limited flexibility due to direct share ownership, and IP is exposed to business risks without separation.
Financial Implications: Dividends are taxed at marginal income tax rates, and there is a Capital Gains Tax discount on shares held for over 12 months.
Compliance Requirements: To remain compliant, the operating company must handle bookkeeping, BAS, company tax returns, and ASIC compliance. Founders are responsible for their personal tax returns.
Advanced Structure for Startups
Uses a family trust for each founder, owning 50% of a holding company (PTY LTD), which fully owns both the IP and operating companies.
Benefits: Provides maximum flexibility for income and capital distributions, along with tax advantages through family trusts and 50% capital gains tax discount on shares held for over 12 months.
Drawbacks: Increased compliance costs associated with this structure.
Financial Implications: The advanced structure offers flexible distribution management and additional protection with a corporate trustee.
Compliance Requirements: For compliance, the operating entity must handle bookkeeping, BAS, company tax returns, and ASIC compliance. The IP/holding company is responsible for company tax returns and ASIC compliance. Founders need to manage family trust tax returns, personal, and beneficiary tax returns.
This advanced structure provides significant flexibility and tax advantages but comes with higher compliance costs and complexities.
Key Takeaways when setting up your company:
Know exactly what you aim to achieve with this business entity. This clarity will guide you in making key decisions, such as choosing the appropriate legal structure and determining if you need to register for GST.
From day one, keep meticulous records. Good business hygiene is essential for securing loans, attracting investments, and making informed decisions. Always keep personal and company finances separate to avoid complications.
Understand the basics of your reporting and tax obligations. Ensure you are aware of your tax obligations and compliance deadlines to avoid fines, which can accumulate every 28 days.
How can Sleek help you?
Visit their website to learn more about their services and how they can support your business needs.
As an UNSW Founders industry partner, they've set a special offer for UNSW Founders, use the discount code UNSW200 at checkout for a $200 discount on ANY accounting plan.
ABOUT UNSW FOUNDERS
As Australia’s leading university-based entrepreneurial program, UNSW Founders has a proven track record of success. Since its inception in 2018, the program has supported 200+ startups every year, provided entrepreneurial skills training to 25,000+ individuals, provided over 10,000 coaching and mentoring sessions, and incubated (co-located) 70+ startups on campus to foster collaboration with the UNSW business, industry, academic, and research networks.
Find out more at - UNSW Founders
Subscribe to the UNSW Founders Newsletter to stay up-to-date with all our programs and events.