Open a Joint Stock Company in Australia

A joint stock company in Australia refers to a business that can be listed on the stock exchange. In Australia, this legal formis known as public company limited by shares. Its main feature is that it is suitable for large enterprises in which investors can buy and sell shares (our team can help you open a joint stock company in Australia).

However, it must be noted that this company type has in common with the private company limited by shares the characteristic that the liability of shareholders is limited to the amount that they have subscribed.

Those who want to start a business in Australia must know that they can also opt for the unlimited company. Our consultants in company formation in Australia can offer more details on the characteristics of other business forms available here.

What are the main characteristics of an Australian public limited company by shares?

The joint stock company in Australia or the public limited company by shares usually refers to a large company that can be listed (although the investors are not obligated to list it), where the shareholders are liable only for their capital participation, while the directors do not hold any personal liability.

Below, our consultants in company registration in Australia have prepared a short presentation concerning the characteristics of the public company:

• it falls under the regulations of the Corporations Act 2001;
• there aren’t any limitations of the number of shareholders, but it must have at least 3 directors;
• out of the 3 directors, 2 of them must be Australian residents;
• it is also necessary to appoint 1 company secretary.

What are the main steps for company formation in Australia?

The process of registering the joint stock company in Australia follows the standard steps for incorporation. The only way to not follow all the registration steps is to purchase a shelf company in Australia, which is a business form that has already been incorporated and it is available for sale.

Amongst the main steps, the investors have to reserve a business name with the Australian Securities &Investment Commission (ASIC), obtain the certificates of registration and sign the statutory papers. For all these, you can rely on the assistance of our team, who can help you open a company in Australia and provide legal representation.

Business owners can reserve a company name with ASIC, by completing and submitting Form 410. Many of the registration requirements are completed with this institution. For instance, when appointing directors, it will be necessary to complete specific forms, including to apply for a director identification number.

Regarding the compulsory managerial team of the company, such as directors and secretaries, ASIC will ask for many documents, including their written consent for filling in this corporate role.

The secretary and the directors must be minimum age of 18 years old at the moment when they sign all the documents, and residency requirements are also available. When you open a company in Australia, you must also have a registered address, this being one of the compulsory steps for company incorporation.

Based on your particularities, you must bring documentation that shows your company has its legal address in a specific, physical place for doing business (purchase agreement, rental agreement, utility bills). Please mind that a business address is mandatory in all cases, including when you purchase a shelf company in Australia (the company already has a registered address, but investors can modify it).

How to list a public company on the Australian Securities Exchange

Considering that the joint stock company can be listed on the Australian Securities Exchange (ASX), in the following section, our consultants, specialized in company incorporation in Australia will present some of the main requirements that must be met by businessowners who want to register their companies with this institution.

The selection process is rather complicated and the applicant entities must prove that they have a very good financial situation. In this sense, applicants must show documentation on their profit, assets, good character of the directors/shareholders, corporate reputation and many others.

As a general rule, the ASX will ask interested parties to pass the profit or the assets tests. Each of these tests involves respecting a large list of criteria. For instance, those will enter the profit test must satisfy all of the matters presented below:

1. the company’s business activity;
2. its audited financial statements;
3. information on the company’s last three years profits;
4. the last year profits;
5. present a director’s statement;
6. being of going concern (the term refers to sufficient proof that the company is financially stable at the moment when the application is made and that it will maintain the financial stability for the foreseeable future).

We recommend you request legal counselling from our team if you plan to register with the ASX, as each criterion involves specific thresholds and our consultants can advise you if your company can be an entity eligible for this procedure.

For instance, we have mentioned that one of the requirements is to present the company’s last 3 years of profits – in this case, the minimum acceptable sum is $1 million, while the last year profits should be at least $500,000.

There are also requirements concerning the period of time when the financial statements were audited – the documents must not be older than 6 months at the moment when the application is made. However, they shouldn’t be completed in less than 75 days prior to the submission of the file.

Those opting for the assets test must provide information on their working capital, liquid assets, net tangible assets, present their financial statements and an audit report.

The registration with ASX is possible for those who set up a company in Australia (an Australian incorporated entity), but it can also be requested by foreign companies expanding in this country as joint stock companies. The registration is similar for both types of entities.

We invite you to contact us if you want to know more on the process of registering a joint stock company.