While a new company set up takes place, there are certain steps involved in that formation which must fulfill for a successful set up of the company or the business. The foremost step that is involved in the formation of the business is to register the same under the ASIC. The ASIC is the Australian Securities and Investments Commission. To explain that shortly, it is one of the independent bodies of the Australian Government acting as the corporate regulator of Australia. The key role of the ASIC is to protect enforce some regulation for the company along with the financial services protecting the consumers, creditors, and even the investors. The whole process enlisted under the Act of Australian Securities and Investments Commission Act (2001).
The ASIC administers the following act as well:
- Corporations Act, 2001(Cth)
- Insurance Contracts Act, 1984(Cth)
- National Consumer Credit Protection Act, 2009(Cth).
ASIC is the key aspect of the formation of the business. It is one of the unique numbers that helps to protect the security of the business information for any new starter of the entity (Rahman 2013). The mention of the regulation is under sec 117 of the Corporation Act, 2001. So, the primary step to set up the business involves registering under the ASIC procedures. Hence, it is advisable to register the company concerning the sec 117 of the Act concerning the ASIC Act.
The steps for registering the business name, involves the following:
- Log in to the account of ASIC Connect.
- If there is no connected account, there are steps available to register (steps to register).
- Logging for the first time requires pressing the option ‘no' to determine that you do not have any current business. In that case, the ASIC key is not mandatory for the registration.
- On the top of the ASIC Connect page, there is an option of Licenses and registration which needs to be clicked to start the procedure.
- Select the business name you would like to register from the drop-down box.
- After reading the information, one needs to tick the boxes and then get it started.
- When, there is an option for the relevant ABN and then select.
- Enter the ABN number without any spaces.
- Enter the proposed business name, in the same manner; you would like that to appear after the registration procedures get over.
- One must remember the fact that the business names are case sensitive.
- Next is the duration of the registration period.
- After the registration period, one must enter business name holder details.
- After the relevant days are given, it is necessary to mention the address of the proposed business name. This involves the registered office address, as well as the branch office, addressed as proposed in the registration.
- The particular matter involved in the proposed business name is that one must enter the eligibility of the members. All the members acting must have entered the age of eighteen considered as the competent age to enter the business name.
- After filling up with the relevant data there is an option to look at the application made, ion short it is advisable to have a review of the business application so made under the ASIC.
- It is once again advisable to check 6he business name whether it is spelled properly or all the relevant information whether they are correct or needs verification.
- The vital step of all is to get the declaration of the alternate members.
- Next is the step that comes for the making of the payment. The usual fees for the registration include the payment of $738 GST in equal forms. Any person who fails to make the payment within ten days from the application for the registration of the business under ASIC shall be considered as canceled. The canceled applications need to register again following the procedures they did in the previous application for the business registration.
- The confirmation can be made only after the payment is made through some of the procedures as mentioned the ASIC. The procedures involve payment either by cash, cheque, or net banking.
Once the confirmation of the procedures made, the newly registered business holder is liable to get the feedback from ASIC with the record of the registration or even the invoice for the same. It is up to the business holder how they will make the payment and how they will receive the feedback. If they choose to get a registration via invoice, then they will receive an electronic mail within the next 48 hours. The payment may be done latest within ten business days.
It is always advisable to renew the registration and the business names so that there is no complication when the business is setup for its ongoing. There are various services available under the ASIC guideline that explains the reduction of the complications which may arise after the registration.
After the entire procedures are over, the new applicants of the business holder are expected to accept the terms and conditions necessary to fulfill the obligation of the registration.
There are certain times when the ASIC refuse to register the business name as proposed by the business holder. The possible reasons may be such that the:
- Obligations not fulfilled as per the regulations under the act.
- The proposed name may be the same of the other registered business and sanctioning so will give rise to some existing business.
- The registered may not have produced the valid concerns from the concerned members.
- For the business registration to be fulfilled, the concerned content involves the following:
- The director(s).
- The acting member(s).
- Since, the form of the business that we are concerned here is the proprietary form of the entity, the consent from the Secretary is not mandatory as mentioned under the act of corporation with reference from the section of 112 and 117(2).
The ASIC provides some regulatory guide hereafter known as the RG 235 for registering the business name. The guideline is mainly for the people who wishes to run and continue with the business within Australia and uses the business name. It is a useful guideline for the business holders to register the business without the complication and to maintain the business name after the registration is complete (asic.gov.au. 2016).
Once the business gets registered under the ASIC procedures, the new business holders are now liable to get the ACN (Australian Company Numbers) or the ABN (Australian Business Numbers). This is mandatory under the business management for Australia. ACN or ABN is that unique number as issued by ASIC that contains nine digits provided to every business organization registered under the Commonwealth Corporation Act 2001 acting as the identifier.
The purpose of the CAN or the ABN helps to reduce the complications for the business holders. It helps to avoid the complications that they may lead to if there is an existence of the same name within the business world and the goodwill may be hampered due to such reasons. It helps reduce the fraudulent by differentiating companies and the subsidies. In any case, the company changes its name; ACN remains the same.
It is essential to note that the company must provide the details of the number of shareholders and their type along with the person's detail who registers under the same s to make sure whether he is the acting body or an agent (australia.gov.au. 2016).
The company needs to set up a constitution which is although not mandatory for the proprietary form of the company. It is advisable to prepare a constitution concerning sec 134 including the governing procedures with the internal management. The constitution consists of the replaceable rules as mentioned in Sec 135 under the act. The necessity of the company constitution modifies preference for issuing the shares, special resolution approval which includes the repayment of the capital, profit participation, and the surplus assets, voting rights and cumulative dividends. Constitutions are mainly based on the redeemable share preference at the time of such occurrence of the events or with the option of the shareholders (legislation.gov.au. 2016).
The formation of the act with the sections comes with a necessity so that there is less complication on the ongoing of the entity purposes. Many sections of the Corporation Act explain about the liability as well as the duties o the directors and the acting members. The explanation of some of the section is as followed:
Sec 124: the section explains about the legal capacity of any corporating head that has the power vested to carry on certain roles in the business for its beneficial purpose. The section regulation explains the critical role of the business formation. It is, therefore, mandatory for the members to follow such which is suited rightfully. The legal capacity of the directors makes them issue or cancel shares or debentures. The capacity ensures some legal granting some rules which are in concern of the security of the ongoing business. The purpose of the section is to see that the directors provide and work under good faith and an ultimate benefit for the members. The legal authority provides the director a jurisdiction to act in concern of the situation. The right of acting swiftly with the situation overhead makes the section a necessity to enter in the act.
Sec 129(1): This section explains the need for the company constitution and contains the replaceable rules along with some other rules that make it mandatory for the growth of business. Our concern here is with the proprietary form of government which does not contain the obligation of the constitution formation. But to be on the safe side, it is advisable to make a constitution formation. The replaceable rules combined in the actual constitution help the business holder to make essential changes as per the situation demands and the necessity of the purpose.
Section 588(M) (3): after the introduction of the section made, there were some necessity o the introduction of this subsection. This subsection explains the security purpose of the creditor. The creditors are well known investors of the company. The lenders are liable to get the compensation from the business holder when there is a loss occurred from the incompetency rather the insolvency of the business holders, mentioned under the subdivision B., In the same manner, the liquidator is also liable for the compensation provided that there is a proof of the company insolvency Abr.gov.au. 2016.
Hence, we see that all the three sections mentioned here play an important role for an ongoing business.
Abr.gov.au. 2016. For Business, Super funds & Charities | Australian Business Register.
Asic.gov.au. 2016. Lodging paper forms | ASIC - Australian Securities and Investments Commission.
Australia.gov.au. 2016. ABN, ACN, business management | australia.gov.au.
Legislation.gov.au. 2016. Corporations Act 2001.