Starting a small business
Even before you decide to start a small business, you’ll need to ensure you are eligible to do so and consider the best structure for your business.
- Checking your eligibility to start a company or business
- Choosing a business structure
- Registering a business name
Some people are automatically disqualified from managing companies or holding business names in Australia.
Can a bankrupt, disqualified or convicted person become a company director or manage a company?
If you are bankrupt or have signed a Personal Insolvency Agreement under Part X of the Bankruptcy Act 1966 (the terms of which have not been fully complied with), you cannot manage a company. For more information see Information Sheet 14 Bankruptcy and personal insolvency agreements (INFO 14).
ASIC has the power to disqualify or ban you from managing a company for up to five years if (and in addition to other reasons):
- you have been involved in two or more failed (liquidated) companies in the last seven years, and
- a liquidator has lodged a report with ASIC for each of the companies about the companies’ inability to pay its debts, or
- money was advanced for the purposes of paying the entitlements of employees of the corporations under the Fair Entitlement Guarantee.
If you have been convicted of certain dishonesty-related offences, such as theft or fraud, you are automatically disqualified from managing a company for five years. The five-year period begins on the day you were convicted or, if you were imprisoned, from the day you were released.
It is a criminal offence to manage a company when disqualified.
Business name holders must also meet eligibility requirements.
When you start a business, it is important to choose a structure that best suits your needs. The most common types of business structures are sole trader, partnership, trust and company.
Find out more about how to choose a business structure.
A business name is the name or title under which a person or company conducts business.
You must register a business name if:
- you conduct business under a name other than your own personal name, or
- you operate a company that conducts business using a different name to the registered company name.
A business name can be registered for one or three years. All business names used in Australia are registered with ASIC.