Small business overview
‘Small business’ is defined differently by regulators in Australia depending on the laws they administer.
For example, ASIC regulates many businesses that are 'small proprietary companies', which means a company with two out of these three characteristics:
- an annual revenue of less than $25 million
- fewer than 50 employees at the end of the financial year, and
- consolidated gross assets of less than $12.5 million at the end of the financial year.
The Australian Taxation Office defines a small business as one that has annual revenue turnover (excluding GST) of less than $2 million. Fair Work Australia defines a small business as one that has less than 15 employees.
Despite these differences, many regulators have informally adopted the definition of ‘small business’ used by the Australian Bureau of Statistics (ABS), which is a business that employs fewer than 20 people.
Why is small business important?
Small business is ASIC's largest customer. Of all Australian companies and businesses registered with us, 96% are considered to be small businesses with fewer than 20 employees.
Small businesses make a significant contribution to the Australian economy. They employ half of Australia's workforce and make up one fifth of Australia's gross domestic product. One of our main objectives is to improve the Australian financial system. Regulating small business is an integral part of this.