NTAA Corporate
ABN 59 108 256 962
Level 3, 29-33 Palmerston Crescent
South Melbourne, VIC 3205
Phone: 1800 799 666

Knowledge Base


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  1. Why does the Company order form require us to get our client's signatures before you will accept the order?
    Before we can register a company in accordance with the Corporations Act 2001, we require signatures from the directors, to show they consent to act, and from the members/shareholders, to show they agree to be bound by the constitution of the company (or an acknowledgment that these people have otherwise provided these consents).

    We still provide clean consent forms with the company register, that basically look a little nicer than, say, a thrice-faxed consent signature!
  2. I know of another shelf company provider that doesn't ask for any signatures from the directors and shareholders, so why do you ask for them?
    These are actually requirements of the Corporations Act 2001 - refer S.201D regarding director consents, S.204C regarding secretary consents, and S.136 regarding members needing to agree in writing to the terms of the company's constitution before the company is registered.

    Also S.117, which sets out the requirements for lodging an application to register a company, states:

    "(5) An applicant must have the consents and agreements referred to in subsection (2) when the application is lodged. After the company is registered, the applicant must give the consents and agreements to the company. The company must keep the consents and agreements."

    The normal way we obtain these signatures is by getting the relevant individuals to sign our company order forms where indicated - however, there is an alternative! If you or your clients do not want to sign our forms, you may use your own form of consent and either send that through with the related order, or let us know that you have the consents - as long as we know the directors and shareholders have consented in writing, we're happy!

    We also have templates for our order forms with no letterhead or any reference to a business that are available upon request for you to use, as well as blank director and member consents - please contact one of our friendly team members if you would like to see any of these.

    Note: Registering a company without first obtaining consents, in our opinion, may be breaking the law!
  3. I want to order a company but want its registration to be backdated to a month ago.
    Even if we did backdate documents - and we don't - we can't backdate company registrations in any event. Companies are registered when ASIC registers them - it's not possible to ask them to backdate it.
  4. What's the difference between a constitution and the memorandum and articles of association?
    Not much - basically, older companies will have a memorandum and articles of association, and newer companies (basically those registered since 1 July 1998) will have a constitution.

    The memorandum and articles of association of a company mostly contained what is now contained in a constitution, although there are fewer restrictions on what must be contained in a constitution (for example, a constitution does not need to set out the objects of the company, and does not need to provide a limit on the number of shares the company can issue (or "authorised capital")).

    Both sets of documents basically provide for the terms of the relationship between the directors, the members (shareholders), and the company.
  5. What are the replaceable rules?
    The Corporations Act 2001 provides a number of "replaceable rules", mainly for companies that do not have a constitution (although they can also apply to a company if the company's constitution does not exclude them). The replaceable rules basically provide for the terms of the relationship between the directors, the members (shareholders), and the company, and can be found throughout the Corporations Act 2001 (S.141 of the Corporations Act 2001 provides a table of replaceable rules found in that Act).

    It should be noted that they do not apply to a proprietary company while the same person is both its sole director and sole shareholder (refer S.135(1) of the Corporations Act 2001). See S.198E, S.201F and S.202C for the special provisions that apply to a proprietary company while the same person is both its sole director and sole shareholder.
  6. Since when have companies been able to have only one sole director?
    In 1995, the Government introduced the Corporate Law Simplification Act 1995, which made it possible for companies to operate with only one individual (who could be the member/shareholder, director, secretary and public officer).

  7. I want the company to have total authorised capital of $1,000, and issue 550 now, and 450 at a later date. Do I need to add a clause in the constitution to cover this?
    There is no need for an additional clause. The concept of authorised capital was abolished in 1998, by the Company Law Review Act 1998. Under our existing constitution, the company effectively can issue an unlimited number of shares at any time in the future, and "the unissued shares in the Company are under the control of the Directors". That is, the directors have the power to issue new shares, and to determine the rights that will attach to the new shares (they can do this by, and record it in, a future resolution of the directors).
  8. Are you sure that companies don't need to use common seals any more?
    S.127(1) of the Corporations Act 2001 states that a company may execute a document without using a common seal if, for example, the document is signed by 2 directors of the company or a director and a company secretary of the company.

  9. How many shares should we allocate to a company such as this? Is there a normal/reasonable amount that is commonly used for companies such as this?
    There is no "normal" number of shares to be issued - it is up to the parties setting up the company and often is governed by tax considerations - please seek specialist advice.

    We set up companies with hundreds of thousands of shares, and some with only 1 ordinary share. You should remember that most ordinary shares of private companies are $1 shares, meaning that the shareholder is expected to pay the company $1 for every share issued to them.
  10. I want to issue shares with different classes (i.e., not ordinary shares). Can I do this?
    You can - simply state the classes of shares on the instruction sheet (e.g., "A' class, "B" class).

    If you tell us any special rights that are to attach to the shares, we can put this in the initial directors' resolution. Otherwise, the shares will be issued with the classes stated, but unless the directors otherwise resolve, the shares will have the same rights as ordinary shares (i.e., a right to vote, a right to dividends, and a right to capital on winding up of the company).
  11. I note that the constitution has "suggested share classes". How do the share classes work, and do I need to use the suggested share classes and labels?

    Unfortunately, there is no such thing as "standard" rights attaching to different classes of shares. Therefore, an "A" class share for one company may have entirely different rights to that of an "A" class share in another company.

    Under subclause 4(b) of our constitution, the directors of the company can issue shares "to such persons on such terms and at such times and with such preferred, deferred or other special rights, whether with regard to dividend, voting, return of capital or otherwise, as the Directors think fit".

    The directors give effect to this (i.e., giving shares special rights) by setting out those rights in the directors' resolution authorising the issue of the shares.

    Subclause 8(c) allows shares to be issued with the rights suggested in Schedule 1:

    "Without limiting in any way the classes of shares that the Company may issue or the rights that may attach to any classes of shares or the variation of such classes or rights, the Company may issue new shares, or (subject to this clause) vary existing shares, of a designated class and with rights attaching to that class as suggested in Schedule 1 to this Constitution".

    However, many of our members want to use their own class system when issuing shares, rather than using the classes and rights suggested in Schedule 1.

    Therefore, if members want to use the suggested classes in Schedule 1, they can simply order a company with shares designated with those particular class "names" (eg, "AA", "BB", etc). Note that, originally, the constitution did not have any "suggested" classes, but this was later incorporated on the request of some members, and we now use "AA", "BB" etc, as these are less likely to cause confusion and/or conflict with orders from members who wish to use their own class system, without knowing of the rights attaching to the suggested classes.

    If they designate the shares with something other than those used in Schedule 1, then the directors of the company will need to specify what special rights, if any, attach to those classes of shares. Where we are instructed what special rights attach, this is incorporated into the first directors' resolution of the company. If not, unless the company has otherwise documented the rights that attach to the shares (we get so many orders separating shares into different classes, that it is clear that many members may have their own system), then the shares will simply have the rights attaching to ordinary shares. That is, the shares will carry a right to vote, a right to dividends declared for those shares, and a right to a proportionate share of capital on winding up of the company.

    If this was not the intention, then the directors may be able to recognise or affirm, by resolution, that the original issue of shares was meant to carry certain rights, though legal advice may need to be sought on the efficacy of this if there is nothing else documenting this intention.

    Otherwise a special resolution of the company can change the rights attaching to shares (refer, eg, subclause 8(a)), though, again, legal advice may need to be sought on the consequent effects of this.

  12. I want to use the company to do (something in particular). Is the NTAA Corporate constitution appropriate for this type of company? Are there any special clauses that should be added for this type of company?
    We do not warrant that our constitution is suitable for any particular purpose - persons ordering a company (normally accountants) need to satisfy themselves that the company is suitable for their clients. It is a standard constitution, which may not be appropriate for all purposes (in particular, it may not be suitable for some professions which have special requirements - persons in such professions should consult with their respective professional association). We are also unable to make anything more than very minor changes to our constitution, and we require precise wording when doing so.
  13. I wish to run my medical/legal/architect's practice through a company. Does your constitution meet the requirements of my professional association?
    Our constitution is not drafted to specifically satisfy the requirements of any industry or professional body. We can set up a normal company for you, but any professional requirements will be your responsibility (the constitution could be changed after the company is set up by means of a special resolution of the members of the company).
  14. I wish to establish a private company with a constitution appropriate for conducting the affairs of a non-profit organisation (i.e., having the necessary non-profit and dissolution clauses prohibiting the distribution of income and assets to members) Can you help me?
    Sorry, but no. You will need to see a lawyer who can draft something for your circumstances.
  15. I have made an error on my instruction sheet and the company has now been set up. What can I do?
    Where an error has been made on setting up a company (i.e., on the Form 201 lodged with ASIC), this can sometimes be fixed by lodging a Form 492 setting out the error, and sometimes proving to ASIC the reason for the mistake (e.g., a photocopy of the original instructions setting out the correct information). The Form 492 makes the changes as at the date of registration of the company.

    Otherwise it may be necessary to lodge a Form 484, which advises ASIC of changes to the company after it has been set up. These changes are made as at the date of the relevant change.
  16. Can I get my company electronically?

    Yes! We can provide companies both on CD and online (as well as with a physical register in a binder). If you choose to receive your companies on CD, you will still receive a checklist of documents for your client (e.g., to open a bank account in the name of the company). In addition, we will include hardcopies of the various documents that require signing by the director/s and member/s of the company.

  17. I have reserved a company name. Can you register a company with that name for me?
    Where an individual has reserved a name and then wants to set up a company with that name, they must write a letter to ASIC asking them to "un-reserve" that name (including the reference number originally given to them by ASIC). Only the person who originally applied for a company name reservation with ASIC has the power to un-reserve that name.

    BUT, be aware: as soon as this is processed, that name becomes available to anyone! SO, we suggest you send this letter to us - we will then personally take the letter to ASIC, and in the process of that name being un-reserved, we coordinate with staff back at our office to register that name before anyone else can take it.

    If you asked us to reserve the name, the process is much easier. We apply for company reservations electronically and therefore can also un-reserve and register a company name simultaneously, electronically to ASIC. This saves time for both parties and restricts your company name from ever becoming available for other people to take!
  18. Is the name I want to use available?
    A name is available unless it is identical to a name that is currently reserved or registered under the Corporations Act 2001 for another body, or is identical to a name that is included on the national business names register in respect of another individual or body who is not the person applying to have the name, or is unacceptable for registration under the Regulations.

    You can check the availability of a company name by visiting http://www.search.asic.gov.au/gns070.html - enter the company name you would like to register and hit the search button. If this name is available, write this name on our order form and send to our office. If you do not have access to the internet, be sure to write a second name option on our order form just in case your first option is unavailable at the time of registration.

    Note: This process only lets you know if the name is available on ASIC's registers. It does not guarantee that the name is legally "safe". For example, the name "Nike Shoes Pty Ltd" might be available, but Nike might have a problem with you running a business through this company.
  19. What if the name is identical to a registered business name?
    If it is proposed to register a name which is identical to a registered business name(s), ASIC must be satisfied that the proposed company is entitled to the use of the name under s147. To assess entitlement to the use of the name, the questions regarding the business name(s) issue shown on the form 201 must be completed. Alternatively, that information may be given in a statement attached to the form 201 (as an annexure) under the heading 'Declaration Regarding Registered Business Name(s)'. Be sure to provide the same information as is required on the form 201.

    The statement must be dated and signed by the applicant as being 'true and correct' as follows: 'I declare that the information given in this statement is true and correct'.
  20. The people wanting to set up the company are currently non-resident. Will there be any problems in registering an Australian company?

    All Australian companies need at least one Australian resident director, and if there is a secretary, at least one secretary needs to be an Australian resident, as well. Shareholders can be non-residents, but there may be tax implications for this (you will need to consult a specialist regarding these, if any). The registered office and principal place of business also need to be in Australia, although this can be changed relatively painlessly at any later time (we provide a service of notifying ASIC of changes such as these, and preparing certain related documents, for $160).

  21. We will initially base the company at a family home. Will there be any problems/extra costs involved in moving it to a different location?
    There are some extra costs, but it is relatively straightforward. We provide a service of notifying ASIC of changes such as these (in this case, a change to the registered office and/or principal place of business of the company), and preparing certain related documents, from $160.
  22. Can the company office address be outside Australia?

    A company's address for its registered office, or place of business, must be in Australia. Refer Regulation 1.0.14 of the Corporations Regulations 2001:

    1.0.14 Address of registered office or place of business

    If notice must be given under these Regulations of:

    (a) the address of an office or a proposed office; or

    (b) the address of a place of business;

    of a corporation or a person, the notice must include:

    (c) if applicable, the number of the room in which; and

    (d) if applicable, the number of the floor or level on which; and

    (e) the place in Australia in which;

    the office or place of business is, or is to be, situated.

  23. What types of addresses will ASIC accept?
    If your client does not have a street number for their address, then ASIC require a property name or a lot number. P.O. Boxes are not acceptable.

    Officeholders' addresses must be their usual current residential address. An alternative address may only be used where the Commission approves an application under S.205D of the Corporations Act 2001.
  24. Can I set up an Australian company with just foreign directors?

    No. At least ONE director has to be resident in Australia. Refer S.201A of the Corporations Act 2001.

    Also, a company is not required to have a secretary, but it if it does, then that secretary (or at least one of them if there is more than one secretary) must ordinarily be a resident of Australia. Refer S.204A.

  25. If some of the directors are overseas, how can the company make decisions?
    The two ways to make official decisions is to have a meeting, even if some of the directors are overseas, or to have all directors sign a written resolution. Note that quorum at a meeting is 2, but the constitution allows a directors' meeting to be called or held using any technology consented to by all the directors.

    A record of any meetings held by that method should then be kept as minutes of the meeting, as well as setting out how the meeting was conducted and who participated.
  26. My client spends a lot of time overseas - will they be a resident of Australia?
    Unfortunately, we cannot provide advice on whether any particular individual is or is not a resident of Australia for Corporations law purposes.

    However, we can tell you that S.201A of the Corporations Act 2001 provides as follows:

    "Minimum number of directors

    Proprietary companies
    1. A proprietary company must have at least 1 director. That director must ordinarily reside in Australia.

    The definition does not appear to have any relation to the tax definition of a "resident" - the question is simply one of whether the person is "ordinarily resident" in Australia - this will be a question of fact.
  27. If I put down an Australian address for the director, will ASIC follow him up to see if it's his address?

    We are not sure whether ASIC makes any inquiries beyond the information provided to them in the Form 201, and it is possible they may be satisfied if the director's address is an Australian address. However, for the purpose of lodging an application to register a company under S.117 of the Corporations Act 2001, S.205D provides that an officeholder's address must generally be their usual residential address.

    Of course, this just sets out the requirements for including an address on an application form, and does not change the requirements of S.201A.

    If you are concerned about whether or not the company will meet these requirements, you may want to consider appointing an additional director who is definitely a resident of Australia.

  28. Can the shareholders of the company live overseas?
    Yes - there is nothing in the Corporations Act 2001 restricting share ownership to Australians. Of course, you will need to consider Australian laws in relation to foreign residents owning shares in Australian companies, as well as any foreign tax laws, etc.
  29. What is a Public Officer?
    The requirement to have a public officer is not found in the Corporations Act 2001 - it is a requirement of the tax law. S.252 of the Income Tax Assessment Act 1936 (ITAA 1936) requires every company carrying on business in Australia, or deriving in Australia income from property to be represented for the purposes of the tax law "by a public officer duly appointed by the company or by its duly authorized agent or attorney".
  30. What is the point of a public officer?
    Basically, the tax law requires companies to have a public officer in case they ever have a problem contacting the company directly. This person is the Tax Office's official point-of-contact in relation to the company.

    For example, the ITAA 1936 states that the public officer "shall be answerable for the doing of all such things as are required to be done by the company under this Act or the regulations, and in case of default shall be liable to the same penalties."

    In addition, "(e)verything done by the public officer which he is required to do in his representative capacity shall be deemed to have been done by the company."

    The ATO can also serve documents on, or give notices to, the public officer, and this will be taken to be sufficient service upon the company.

    The public officer is also answerable for other tax-related actions of the company, such as record keeping and submitting company tax returns.
  31. Who can be a public officer?
    The public officer must be a natural person at least 18 years old, and must generally be an Australian resident (though there are some exceptions for, e.g., foreign companies). Also, since the ITAA 1936 only refers to "the public officer" in the singular, it is our understanding that you can only appoint ONE public officer.
  32. How do I appoint the public officer?
    If the instruction sheet tells us who the public officer will be, we will ensure that this appointment is recorded in the first directors' resolution.

    However, the company still needs to inform the ATO of the identity of its public officer within 3 months of commencing business or deriving income in Australia (we do not notify the ATO about the public officer). You can normally do this when the company submits its ABN/TFN registration.

    Note that, if the company is not intending to apply for an ABN or TFN it will still need to notify the Commissioner of the identity of its public officer, unless the company will not be carrying on business in Australia, or deriving income from property (for example, interest, rent or dividends) in Australia. Please contact the ATO for how best to do this.
  33. ASIC has told me that my company can't do certain things without a Corporate Key. What is a Corporate Key?
    The corporate key is an 8-digit number uniquely associated with a company's ACN. In many respects it is similar to the PIN on a bank account and is used to keep your company information secure. Every company needs only one corporate key.

    Once you have a corporate key you can register to view your company records and lodge documents for your company online. Once you have online access you will no longer need to use your corporate key to lodge online.

    The corporate key is sent by ASIC to the registered office within a day or two of registration.
  34. Why do your resolutions require all directors/members to sign them?

    S.248A of the Corporations Act 2001 allows companies with more than one director to pass a resolution without a directors' meeting being held if all the directors entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution set out in the document (also called "circulating resolutions").

    S.248B also effectively requires resolutions of sole director companies to be made by written resolution (since it would be a bit weird to require a sole director to make decisions about the company in a meeting with him (or her) self).

    Since the requirements for holding a meeting (such as sending out notice of the meeting) and for proving the meeting took place are more difficult than simply having all of the directors sign the resolution, all of our resolutions are simply written resolutions, required to be signed by all of the directors (instead of "Minutes of a meeting"). Note that, if your company still wants to hold directors' meetings (e.g., if one of the directors refuses to sign the resolution), the company can still hold a meeting and set out any resolutions made in that meeting in minutes of the meeting.

  35. Is it possible for a single director of a company with more than one director to execute documents on behalf of the company?

    S.127 of the Corporations Act 2001 (in particular S.127(1) and (2)) sets out some of the ways that a company can execute documents (including deeds), including by having the document signed by two directors of the company, or by a director and a company secretary of the company (with or without using a common seal). However, S.127(4) states that "This section does not limit the ways in which a company may execute a document (including a deed)."

    In response to requests from members, under our constitution (clauses 107(c) or 108(c), depending on whether the company uses a common seal), the directors are able to nominate a particular director to sign documents on behalf of the company. This nomination should ideally be set out in a written directors' resolution.

    It should be noted that where documents are not signed in accordance with S.127(1) or (2), people dealing with the company may not be able to rely on the assumptions set out in S.129(5) and (6) (i.e., they cannot assume that the director has been duly appointed and authorised to act as a director).

  36. How can I cancel shares already issued?

    We cannot do this for you, but it appears this can be done under S.256C of the Corporations Act 2001. If some people's shares are getting cancelled and not others, this may be more problematic (although it may simply require a special resolution). Refer also to S.256B.

    We only provide these details to give you a head start, and it may be worthwhile calling ASIC. There may also be both CGT and stamp duty issues to consider.

  37. I have a public company (limited by guarantee). Can you change one of the clauses in the constitution in regards to the period of time a person may be on council?
    No. You will need to find a legal practitioner (with some knowledge of public companies) who can look at the entire constitution to determine whether and how a change can be made, then draft the relevant clause, and probably assist you in getting the change then done and registered (as a public company, the changed constitution will need to be lodged with ASIC).
  38. I have a client currently operating under a company structure with different classes of shares, for income streaming purposes. We want to change this to a unit trust, effective from 1 July, with units in the same proportions and with the same effect as the current share structure. Is this possible? If so, what information is needed on the application form?
    A company cannot simply be converted to a unit trust. A unit trust would need to be set up and the company's assets transferred to it.

    We can set up a new unit trust, but as to the effects of this (i.e., transferring all of the assets of the company to the unit trust, for example) and whether this is even a good idea (taking CGT, stamp duty, etc, into account) we can't help with.

    Therefore, we can set up the unit trust, but what you do with the trust once it's set up is up to you. You may want to log a Hotline Call if you want to talk to someone about the tax effects of this restructure.
  39. We have a company and want to sell/transfer shares in it. What are the procedures for doing this and can NTAA Corporate help with any documentation?
    The transfer of shares in a company must normally be done in accordance with the constitution/memorandum and articles of association of the relevant company. Often this will require a transfer of shares form to be executed, and various changes made to the company register. Sometimes the approval of certain entities may need to be sought (eg, the directors, or other shareholders). Whether or not the shares are transferred for any consideration, there may also be CGT/stamp duty consequences. In addition, ASIC needs to be notified of the change.

    We can assist with the notification to ASIC, and also prepare a directors' resolution, noting the transfer (we provide this service for a fee, and a 'Company Changes' instruction sheet will need to be completed and sent to us). However, we do not prepare any of the other documentation, so if the parties do not prepare them themselves, they may need to seek legal advice.
  40. The memorandum and articles of association of our company state that there must be a minimum of two directors. One of the directors passed away last week. Do we need to appoint another director until we change the constitution?
    This is advisable, but the company may not need to appoint another director immediately so long as it is careful not to carry out any business until a new constitution (allowing for a sole director company) has been adopted, as anything done before this time (i.e., with one director, although the memorandum and articles of association require that there be two) may not be valid.

    This includes where the company acts as trustee of a trust.

    If the constitution doesn't provide for what happens in these situations, S.201H(1) of the Corporations Act 2001 (a replaceable rule) provides as follows:

    "S.201(H) Appointment by other directors
    1. The directors of a company may appoint a person as a director. A person can be appointed as a director in order to make up a quorum for a directors' meeting even if the total number of directors of the company is not enough to make up that quorum."

    Such an appointment needs to be ratified by the shareholders.

    However, the replaceable rules of the Corporations Act 2001 only apply to proprietary companies registered after 1 July 1998 (or those registered before 1 July 1998 that repeal their constitution after that day), and only where the company's constitution hasn't displaced or modified the replaceable rules.

    If, at the end of the day, the company does not appoint another director to replace the one who has passed on, and it can't rely on the replaceable rules and doesn't have anything else available, the board of directors will not be able to meet and make any decisions (whether for itself or for the trust), as it can't make quorum. However, the shareholders will still be able to make decisions for the company (whether at a general meeting or by written resolution).

    Also, ASIC will need to be notified of the changes within 28 days of them occurring.

    Note: S.201F(1) also provides that "The director of a proprietary company who is its only director and only shareholder may appoint another director by recording the appointment and signing the record."
  41. What other company services do you provide?

    Other Company-related services we provide are:

    • notifying ASIC of any changes to the company that need to be notified, as well as the option to adopt our constitution which allows for a sole director (from $160 offline, depending on the number of changes to be made) or if online, $99 for the electronic service and $154 for bound and delivered service;
    • company name changes ($506 which includes the $366 ASIC fee and our fee of $140);