What is a proprietary limited company?
A registered entity which can trade like a natural person with many liability and tax benefits over a sole trader. Limited Liability: Companies still provide effective personal asset protection. Taxation: Corporate tax rate of just 30% with no Medicare Levies. Your accountant can show you how a company can be used effectively to run your business. Contracting: With recent developments in the Industrial Relations front, many organisations will only deal with registered bodies which trade with A.C.N.s & A.B.N.s. Sole Trader: Now more than ever individuals are trading as companies because of tax rates and personal liability issues. Partnership: A company is an efficient means of organising a group of individuals to trade as a sole structure. Name Protection: When a name is incorporated it becomes registered throughout Australia and an identical name cannot be registered in any state as a company or a Business Name.
It is a private company registered by the Australian Securities and Investments Commission. At least one person is required to form a proprietary limited company who must fill the role of both Director and Secretary. Companies are required to lodge annual returns each year. A proprietary limited company cannot invite the public to invest or deposit money with it. The liabilities of the shareholders are limited to the share capital they have subscribed and any debts they may have personally guaranteed. Contact ASIC for further details.
One of the best known and most widely used business structures is the Proprietary Limited Company (usually shortened to “Pty Ltd”). When a company is created (called incorporation) it exists independently of its shareholder owner/s and can enter into contracts, and sue and be sued in its own name. A company also has perpetual succession, meaning that it continues to exist despite the death, withdrawal or retirement of the owner/s, until it is wound up in accordance with the Corporations Law. The control of a company lies with its board of directors, and the Corporations Law and the company’s constitution limit the precise nature of the control. The Corporations Law also controls most aspects of a company’s formation, how business is conducted and winding up. Unlike sole traders and partnerships, the liability of the owners of companies is generally limited. So owners are only liable to the extent of the capital they have contributed (or promised to contribute) to the company, unless th
A proprietary limited company (often abbreviated as Pty. Ltd. or P/L) is legally defined as a business structure that has at least one shareholder with a limited number of shares. The opposite of proprietary limited is the public limited company. This is a company that is listed on the stock exchange. Anyone can buy shares in this type of company. The laws of company structure in Australia are set up in the Australian Corporations Act 2001 (Cth). Under this Act, a proprietary company must either be: • Limited by shares. Under this model, shareholders have greater protection against being liable for company debts. Their liability is limited. • Unlimited. In this model, shareholders face unlimited liability. There are certain structures that must be in place in a proprietary limited company. It must have at least one shareholder and have no more than 50 non-employee shareholders. There must be at least one director who must live in Australia, and there must be an appointed secretary. The
