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Australia is an island continent, located in the Southern Hemisphere. It has an area of nearly 7.7 million square kilometres making it the world’s sixth largest nation after Russia, Canada, China, the USA and Brazil. It has, however, a relatively small population. The Australian federation consists of six States and two Territories. Canberra is Australia’s national capital. The Parliament of Australia is located in Canberra, as is most of the Australian Government public service.
The population of Australia is just over two million. Most of Australia’s population is concentrated in coastal areas with the majority living in State and Territory capital cities.
Australia has a federal system of government under which the States retain considerable power and authority. There is also an independent system of local government, which operates at municipal level. Australia is a democracy and has a written Constitution. Federal Parliament is comprised of two houses, the House of Representatives (the lower house) and the Senate (the upper house). The House of Representatives is responsible for introducing legislation, the Senate being more of a house of review.
In 2011 Australia had one of the OECD’s fastest growing economies with an estimated GDP of USD 40,800. While the economy has been affected by the global economic recession Australia is out performing more advanced economies and is set to recover from the downturn earlier than expected.
A large portion of Australian trade has diverted away from Europe and North America towards Japan and other East Asian markets.
The official and spoken language is English.
Australian dollar (AUD)
Corporations Act 2001.
The following type of companies can be registered in Australia.
An Application to Register is lodged with the Australian Securities & Investments Commission (“ASIC”).
Yes, for specific activities, which include banking, providing public trustee services, insurance, financial services and personnel consultancies must acquire applicable licences.
An Australian company possesses under the Companies Act, the same powers as those of a natural person.
Yes, it must be maintained in a State or Territory of Australia and be open to the public for specified minimum hours on business days.
Yes, it may be the same address as a company’s registered office but it must be the physical address from which the company’s principal business is carried out.
English. Names can be in a foreign language but restrictions as described in the previous section apply.
Yes, for specific activities, which include banking, providing public trustee services, insurance, financial services and personnel consultancies. There is an extensive list of words that can only be used with the consent of the appropriate Minister of APRA (Australian Prudential Regulation Authority).
A proprietary company is one which is limited by shares and the number of members is limited to 50 non-employee members (counting joint holders of shares as one person) and not counting a person who:
The Constitution of a proprietary company usually restricts the transferability of its shares by bestowing absolute discretion upon the Directors and a proprietary company cannot offer its shares for sale or subscription to members of the general public.
All other companies not covered by the above definition are deemed to be public companies.
Companies must disclose on incorporation and whenever situations change:
The Companies Act no longer provides for the concepts of a company having a stated Authorised Capital or a “par” value for its shares. A company can issue up to any amount of shares it wants to and within reason, at any value.
Shares may be issued carrying varying attributes and obligations relating to voting rights, rights to dividends and profits on winding up and as to priority of payment of dividends and whether or not they are cumulative. Shares may also be issued as partly paid with set instalments or with future instalments to be determined by the directors.
Tax is levied at the rate of 30% of net assessable income less allowable deductions on a World-wide basis. Tax losses may be carried forward indefinitely.
The tax year in Australia ends on 30th June. A substituted accounting period can be applied for to co-incide with overseas holding companies.
The rate of GST is 10%.
If fully franked dividends (i.e. dividends derived from profits on which Australian corporate tax has been paid) are paid by an Australian subsidiary to its foreign parent, no dividend withholding tax is payable. To the extent that dividends are unfranked, dividend withholding tax of 30% (or as reduced under a relevant double tax treaty) is payable on the gross unfranked account.
Australia has entered into double tax treaties with over 40 countries.
Yes, Companies must prepare up to date financial records that:
All companies must have financial records so that:
If the company is a 'small proprietary company' (as defined in the Corporations Act 2001) it will generally not have to prepare formal financial reports under the Corporations Act each year and lodge them with ASIC. However, the company must still keep financial records, and may need financial reports for tax purposes. Large proprietary companies and public companies - even non-profit public companies - must prepare financial reports, have them audited and lodge them with ASIC.
Large Pty or Small Pty which are controlled by foreign entities must provide an auditor’s report to the ASIC together with their written financial statements and director’s report for each financial year.
A proprietary company have at least one Director (who must be a resident of Australia) and a public company must have at least three Directors (at least two of whom must be residents of Australia). Directors must be natural persons.
A proprietary company may or may not have a company secretary and it can have more than one. If a company secretary is appointed he or she must be a resident of Australia. If more than one is appointed at least one must be a resident of Australia. A public company must have a company secretary who is a resident of Australia.
An annual return is not required to be lodged on the anniversary of the date of incorporation. The ASIC sends to the company, annual review documentation, which shows what details the ASIC has recorded as to the structure of the company. The company is required to review these details and inform the ASIC of any changes or discrepancies.
At the same time:
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