How to Start a Business in Australia for Under $700: A Complete Guide

The dream of being your own boss is powerful. You picture the freedom, the potential for growth, and the pride of building something from the ground up. But for many aspiring entrepreneurs, that dream hits a speed bump the moment they start Googling "startup costs."

There is a common misconception that incorporating a company requires thousands of dollars in upfront capital. You might envision expensive lawyers, complex paperwork, and endless government fees. It is enough to make anyone hesitate.

Here is the good news: the actual administrative process of setting up a proprietary limited (Pty Ltd) company in Australia is surprisingly affordable. In fact, if you follow the right steps, you can get the legal framework of your business up and running for less than $700.

While there will always be operational costs later—like inventory, marketing, or insurance—the barrier to entry is much lower than you might think. This guide will walk you through exactly how to navigate the Australian Securities and Investments Commission (ASIC) requirements, handle your registrations, and launch your venture without breaking the bank.

The Myth of Expensive Startups

When people talk about businesses costing "tens of thousands" to start, they are usually factoring in rent, fit-outs, stock, and staff. However, the legal act of birthing a company is a standardised administrative process.

You do not necessarily need to hire a high-priced legal firm to file the paperwork for you. With the digitisation of government services, much of this can be done yourself online.

By stripping the process down to the essentials, we can see exactly where your money goes. The goal here is to establish a legitimate, compliant structure that protects you and allows you to trade, all while keeping your initial cash burn to a minimum.

The Financial Breakdown: Where Does the $700 Go?

Let’s look at the numbers. To legally register a standard proprietary company in Australia, you are essentially paying fees to the government regulator, ASIC.

Here is the breakdown of the essential costs (based on current ASIC fees):

1. Business Name Reservation: ~$62 (for one year)
2. Company Registration Fee: ~$611

Total Estimated Cost: ~$673

This leaves you with change from your $700 budget. It is important to note that ASIC adjusts these fees periodically (usually on July 1st each year based on CPI), so it is always wise to check the official ASIC website for the precise dollar figure on the day you apply.

Now, let’s explore the step-by-step process to get this done.

Step 1: Choose Your Structure Carefully

Before you spend a cent, you need to decide if a "Company" is actually the right structure for you. The two most common structures for new businesses in Australia are:

1. Sole Trader: This is the simplest and cheapest structure. You trade as yourself. There are few setup costs, but you have unlimited liability. If the business goes into debt, your personal assets (like your house or car) are at risk.
2. Company (Pty Ltd): This creates a separate legal entity. The company can incur debt, sue, and be sued. Crucially, it offers "limited liability" to its shareholders.

Most people reading this guide are likely interested in the Company structure because of the asset protection it offers. While a Sole Trader setup is cheaper (often free if you just use your own name), the Company structure provides a level of security and professional credibility that is often worth the $635 investment.

Why Pty Ltd?

"Pty" stands for Proprietary (meaning private) and "Ltd" stands for Limited (meaning liability is limited). This is the standard vehicle for small to medium businesses in Australia. It allows you to separate your personal finances from your business finances, which is a key step in risk management.

Step 2: Naming Your Venture

Once you have settled on a structure, you need a name. This is often the most exciting part, but it has legal implications.

You cannot simply pick a name and start printing business cards. You must ensure the name is not already taken or too similar to an existing entity.

Checking Availability
Visit the ASIC Connect website or the Australian Government’s Business Registration Service. You can search their registers to see if your desired name is available.

Reserving the Name
If your perfect name is available but you are not quite ready to pay the full registration fee today, you can reserve it.

• Cost: currently $62.
• Duration: This holds the name for you for one year.

However, if you are ready to register the company immediately, you can technically skip the reservation step and do it all at once during registration. But for many, securing the name is a psychological milestone that makes the business feel "real" for a low entry cost.

Step 3: Governance (The "Rules of the Game")

Every company needs a rulebook. This dictates how the company is managed, how directors are appointed, and how shares are transferred.

You have two main choices here, and one of them will save you significant money:

1. Constitution: A custom document drawn up by a lawyer. This allows you to tailor the rules specifically to your needs. This can cost hundreds or thousands of dollars in legal fees.
2. Replaceable Rules: These are a standard set of rules written into the Corporations Act 2001. They are a "one-size-fits-all" solution provided by the government.

The Budget Option: Replaceable Rules

For a standard startup with a simple structure (e.g., you are the sole director and shareholder), relying on Replaceable Rules is entirely sufficient and, best of all, free.

You do not need to draft a document or pay a lawyer. You simply elect to be governed by the Replaceable Rules during your application. This is a massive cost saver that keeps you under that $700 limit. You can always adopt a constitution later as your business grows and becomes more complex.

Step 4: Compliance and Consent

Before you log on to pay your registration fee, you have some paperwork to sort out. Even though you are the one setting up the company, the law requires formal consent from everyone involved.

Written Consent
You must obtain written consent from:

• Directors: The people running the company.
• Members (Shareholders): The people who own the company.
• Secretary: If you appoint one (this is optional for private companies).

If you are the sole director and shareholder, you simply sign a document stating that you consent to hold these roles. You do not need to submit these to ASIC, but you must keep them in your company records.

Director Identification Number (Director ID)
This is a critical new requirement in Australia. Every director must apply for a Director ID. This is a unique 15-digit identifier that stays with you for life.

• Cost: Free.
• How to apply: You apply via the Australian Business Registry Services (ABRS) using your myGovID.
• Timing: You must have this before you are appointed as a director.

Step 5: The Registration Process

This is the big moment. You have your name, your structure, your Director ID, and your consent forms. Now you register with ASIC.

You can do this directly through the Australian Government Business Registration Service (BRS). This platform is a one-stop-shop that allows you to apply for your Australian Business Number (ABN) and Tax File Number (TFN) at the same time as your company registration.

The Fee
The fee to register a proprietary company with share capital is currently around $611.

This is the largest single expense you will face during setup. Once paid, ASIC will issue you an Australian Company Number (ACN). This is your company's official birth certificate.

Tax Registrations
While you are in the BRS portal, you should also register for:

• ABN (Australian Business Number): Essential for trading and invoicing.
• TFN (Tax File Number): Your company needs its own TFN, separate from yours.
• GST (Goods and Services Tax): Mandatory if you expect to turn over more than $75,000. If you are starting small, you can wait to register for this, but many businesses do it upfront to claim back GST on setup costs.
• PAYG (Pay As You Go): Mandatory if you plan to hire employees (including yourself) and pay wages.

Applying for an ABN, TFN, GST, and PAYG is free.

Beyond the $700: Ongoing Expenses to Watch

Congratulations! If you followed the steps above, you have a legally registered Australian company for roughly $673 to $700.

However, a registered company is just a shell. To make it a functioning business, you need to be aware of the "Phase 2" costs. Transparency is key here—we want you to be prepared, not surprised.

1. Accounting and Bookkeeping

While you can register a company yourself, managing company finances is more complex than managing personal tax. Company tax returns, Business Activity Statements (BAS), and annual financial reports are mandatory.

• Budget Tip: Cloud accounting software like Xero or MYOB is essential. Subscriptions usually start around $35 and move up for this depending on features
• Professional Help: Consider hiring an accountant for your annual return. While this costs money, their advice on deductions often pays for itself.

2. Insurance

Limited liability protects your personal assets, but it doesn't stop the company from being sued.

• Public Liability: Essential if you interact with the public.
• Professional Indemnity: Important if you provide advice or services.
• Workers Compensation: Mandatory if you hire staff.

3. Corporate Compliance Fees

ASIC charges an annual review fee to keep your company registered. This is currently around $329 per year for a proprietary company. You don't pay this upfront, but you need to budget for it next year.

4. Domain and Email

You will likely want a website.

• Domain Name (.com.au): Generally costs between $15 and $50 per year.
• Email Hosting: Google Workspace or Microsoft 365 usually costs around $10-$15 per user per month.

Why You Might Still Want an Accountant for Setup

We have shown that it is entirely possible to DIY your company registration for under $700. So, why do many business owners still choose to pay an accountant or formation service to do it for them?

It comes down to peace of mind and structural strategy.

The "Whoops" Factor

If you accidentally choose the wrong class of shares or mess up the member allocation, fixing it later with ASIC can be costly and frustrating.

Share Structure Strategy

A standard setup usually involves "Ordinary Shares." But what if you want to bring in investors later? What if you want to distribute dividends to family members for tax efficiency? An accountant can set up different "classes" of shares (e.g., A-Class, B-Class) right from the start, giving you flexibility that a DIY setup might miss.

Tax Efficiency

Is a standalone company actually the best option? Sometimes, a "Trust" structure with a corporate trustee is better for asset protection and tax planning. You won't know this unless you seek advice.

Conclusion: It is Within Your Reach

Starting a business often feels like jumping off a cliff and building a plane on the way down. But financially, the jump doesn't have to be terrifying.

By understanding the specific government fees involved, you can see that the barrier to entry in Australia is relatively low. For less than $700, you can secure your name, establish your limited liability structure, and get your ACN.

The key is to separate the administrative cost from the operational cost. Do not let the fear of thousands of dollars in legal fees stop you from taking the first step.

If you are confident in navigating government portals and have a simple business model, the DIY route is a fantastic way to keep your startup lean. However, if your situation involves partners, investors, or complex family assets, allocating a little extra budget for professional advice is an investment in your future peace of mind.

You have the idea. You have the budget breakdown. The only thing left to do is start.

Looking for help with your accounting, bookkeeping or taxes? Mahler Advisory your Gold Coast small business accountant can help! Click the call button or schedule an online appointment to discuss your specific requirements and discover the optimal structure for your unique situation.

*Please note that the above information is general advice only. We recommend you seek advice from a specialist relevant to your personal situation. This information is correct at the time of publishing and is subject to change*

Tax laws and regulations can change over time, so it is important to stay informed about any updates or amendments that may affect your tax obligations. The Australian Taxation Office (ATO) is the authoritative source for the most up-to-date information regarding tax requirements and regulations in Australia.