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A Useful Guide To Know Everything About Business And Company Registration
The aim in the business world is: to make a profit and increase your business. But still, before you start in this challenging and competitive world, there are some steps that you need to take to make it possible. One of these steps is Company Registration. So, let’s talk about how company registration works, shall we?
First of all, what do you mean by company registration? It means filing for incorporation with the state where the firm will be based under the corporations’ laws. A corporation is a separate legal entity owned by shareholders who enjoy limited liability (if any) for its debts. Corporations are granted powers by their state of incorporation, including limited liability.
What are the Steps in Company Registration?
Registering a company is not as easy as it sounds. It takes time and effort before you can finally start a business under your new company name. To be able to register for a company, here are the steps that you need to take:
The first thing you need to do is get yourself a business number. A Business Number (BN) is. To put it simply, your company’s registration number. In Hongkong, every business needs a Hong Kong business number before officially registering their companies. However, suppose you’re planning to set up a sole proprietorship, meaning one owner only where the owner includes himself in the business name. In that case, it is not necessary to get a BN since you are exempted from registering for one.
Select Your Company’s Name
How about the name of your company? Sooner or later, selecting what will be your company name will be part of your options; but before anything else, know these things about naming your company:
- Check if your proposed company name is available by looking on ASIC Connect. If it’s not, you might have to choose another name.
- Name your company in 3 words or less for easy identification. You can add more information on the second part of your business name but don’t go overboard.
Draft Your Company’s Constitution
After choosing your company’s name, you should draft your company’s constitution. It contains essential information about your new company that needs to be stated explicitly, including:
- Business purpose and objectives of the company;
- The mandate of directors and obligations they need to comply with;
- Employment arrangements for critical persons involved in the business;
- Share capital structure which includes how many shares are being issued and by who;
- Rights, privileges, and obligations of shareholders.
Apply for Company Registration
After you draft your company’s constitution, it’s time to file for a simplified version of a set of incorporation documents to ASIC. You can do this online or through the post office. The registration fee is $45 plus an additional $40 per extra page if needed.
If you’re using paper forms, then expect that there will be a filing fee and state duty payable in addition to the fees mentioned above. This whole process should take five days before officially being approved by ASIC as your registered business name or ABN.
Another thing you have to consider after being successful with your company registration is applying for a business license. Without this, your business will not work and earn money. Here’s the best part: you don’t need to apply for a business license if you’re starting up as a sole trader or hobbyist. The reason is that you’re not conducting business as a privately owned company. Those running as companies need to look at their state/territory for further licensing requirements.
What about issuing shares? It’s one of the most important things you should consider when establishing your company. It allows people who put money into your business to share in its ownership and profits; but before doing that, ask yourself this: Do I need to issue shares? The answer to this question largely depends on two factors: the company’s size and the investors’ appetite for risk. It might be easier to issue ordinary shares if you’re a small company.
Still, if you’re a larger company or seeking outside investment, then you’ll probably have to consider giving different types of claims, such as preferred shares or debt securities.
Company registration is just one step in starting up a business. There are many things that you should consider when starting up a business or company and the process of company registration is just one of them. Make sure to do your research and seek professional advice if needed so that you can make the best decisions for your business.