Common Mistakes When Registering A Company in Australia

The first step is always the hardest, which is true in starting a company. Many do not know how to start, which could lead to mistakes if not guided accordingly. There is no need to fear, as registering a company in Australia is easy. We also listed some common mistakes for you to avoid.

1. Adding Non-Active Directors

Only add directors who will be actively involved in the business. Non-active director’s assets will be at risk if the company has financial trouble. And because they are inactive, they have less knowledge and experience on how the business runs. Without proper knowledge and experience, it can lead to conflicts and disagreements on the company’s direction.

2. Appointment of Wrong Directors

A director has numerous legal responsibilities and decides on critical matters for the business. Before appointing a director, ensure the person understands the role and the risk of being one to avoid miscommunication.

3. Wrong Shareholder

Adding a shareholder with a different vision and no value to their role can lead to unoptimized tax benefits. Pick the right shareholder because it will lead to better financing options, increased credibility, and support future business ventures.

4. No Shareholder Agreement

We strongly encourage drafting a shareholder agreement if most shareholders are not family members. This way, it is clear what their rights are. It outlines the process for decision-making, and they have protection when a dispute arises.

5. Choosing the Cheaper Route

Remember that starting a business is costly, and the expenses involved are for the company’s betterment in the long run. One of the expenses is having a legal constitution, and having one can protect you from costly mistakes in the future. Some entrepreneurs try to cut some expenses. They run a company without a constitution – no legal rules and regulations. For sure, it will be a massive headache in the future when things go wrong.

In conclusion, it is easy to register a company in Australia. It will only be confusing and complicated if you cut corners or appoint the wrong officers. Investing in time and resources to get the best advice leads to a successful business setup. We are always here to help you with the first step.

Should you require any additional assistance please don’t hesitate to contact us.