Small businesses are ironically among the largest contributors to the Australian economy. 99.8% of all Australian businesses are small to medium enterprises, and 88% employ less than five people. It also helps that the government is supportive of its independent and creative inhabitants. They make it easy for individuals to start new ventures with considerate fees along with the help of a firm offering a business registration service. With this accessible service, aspiring entrepreneurs all over Australia wonder if their small trading venture is already considered a small business so they can immediately register.
What Is Considered a Small Business in Australia?
Various organisations in Australia define small business differently. They categorise them according to their organisation’s purpose, such as taxation, business name regulation, and so on.
Future entrepreneurs can start with the Australian Securities & Investments Commission (ASIC), which regulates all companies, financial markets and services in the country. They are also in charge of moderating business names. ASIC defines a small business as a “small proprietary company”. It should satisfy at least two criteria within one financial year:
- Less than $50 million of consolidated revenue of the company and any entities under it.
- Less than $25 million of consolidated gross assets of the company and any entities under it.
- Fewer than 100 employees by the end of one financial year.
Many enterprises meet two to three conditions, making ASIC’s definition an extremely broad business category. On the other hand, the Australian Bureau of Statistics (ABS) has a narrower idea about small businesses. ABS defines them as enterprises with fewer than 20 employees. The organisation further classified business into subcategories which are the following:
- Sole proprietorships and partnerships, or non-employing businesses.
- Micro-businesses, or those employing one to four people only,
- Other businesses, or those employing five to 19 people.
ABS focuses on the independent ownerships of business and whether the owners have close control of all its operations. Finally, the Australian Taxation Office (ATO) also has its own definition. According to ATO, small businesses have an annual aggregated turnover of 2 to 10 million AUD. Those with less than $2 million are referred to as microbusinesses.
Is Business Registration Really Necessary?
Unless an individual is a sole proprietor trading under his/her own name, there is no requirement for registration. Otherwise, any size of business must properly register to meet legal matters. Again, ASIC is the first organisation entrepreneurs have to follow in registering a business.
Can a Business Be Registered Online?
A business is ready to register once it has a unique and proper business name, a business address, and owners and shareholders’ details. Internally, one must also have a clear business structure and type. While the documentary requirements may sound overwhelming, business registration is fairly easy, especially with the help of a business registration service. It generally takes about 15 minutes for business owners to register their company as long as their documents are complete. In some cases, ASIC manually reviews applications but is usually about the availability of a company name. Otherwise, a new company is approved in a matter of minutes.
Upon successful registration online, ASIC provides business owners with a unique nine-digit identifier called the Australian Company Number (ACN). This number allows ASIC to monitor different companies in the country. Keep in mind that company registration is different from trademarking a company name. For the exclusive use of a business name, one must visit Intellectual Property or IP Australia.