Document ID: chunk:federal_register_of_legislation:C2025C00185:section:3:p1
Version: federal_register_of_legislation:C2025C00185
Segment Type: section
Provision Reference: s 3 (pt 1/2)
Character Range: 405807–408523

3  Setting up a new company
  The operators of small businesses can either buy "shelf" companies or set up new companies themselves.

3.1 "Shelf" companies
  The operator of a small business may find it more convenient to buy a "shelf" company (a company that has already been registered but has not traded) from businesses which set up companies for this purpose or from some legal or accounting firms.

3.2 Setting up a company
  To set up a new company themselves, the operator must apply to ASIC for registration of the company.
  A proprietary company limited by shares must have at least 1 shareholder.
  To obtain registration, a person must lodge a properly completed application form with ASIC. The form must set out certain information including details of every person who has consented to be a shareholder, director or company secretary of the company.
  The company comes into existence when ASIC registers it.
[sections 117—119, 135—136, 140]

3.3 ACN and name
  When a company is registered, ASIC allocates to it a unique 9 digit number called the Australian Company Number (ACN). (For use of the ACN see 4.1).
  In practice, a new company must have a name that is different from the name of a company that is already registered. A proprietary company limited by shares must have the words "Proprietary Limited" as part of its name. Those words can be abbreviated to "Pty Ltd".
  A proprietary company may adopt its ACN as its name. If it does so, its name must also contain the words "Australian Company Number" (which can be abbreviated to "ACN"). For example, the company's name might be "ACN 123 456 789 Pty Ltd".
[sections 119, 147—161]

3.4 Contracts entered into before the company is registered
  A company can ratify a contract entered into by someone on its behalf or for its benefit before it was registered. If the company does not ratify the contract, the person who entered into the contract may be personally liable.
[sections 131—133]

3.5 First shareholders, directors and company secretary
  A person listed with their consent as a shareholder, director or company secretary in the application for registration of the company becomes a shareholder, director or company secretary of the company on its registration.
  The same person may be both a director of the company and the company secretary.
  See 5.1 and 5.2 for directors and 5.4 for company secretaries. See 6.1 for shareholders.
[section 120]

3.6 Issuing shares
  It is a replaceable rule (see 1.6) that, before issuing new shares, a company must first offer them to the existing shareholders in the proportions that the shareholders already hold. A company may issue shares at a price it determines.
[sections 254B, 254D]