Introduction
Australia is consistently ranked as one of the best countries in the world to start a business. With a stable economy, a transparent legal system, and a consumer market of over 26 million people, it offers genuine opportunities for entrepreneurs at every stage. Here is a practical and up-to-date guide to the legal requirements, costs, and registration steps involved in starting a business in Australia in 2026.
Step 1: Choose Your Business Structure
The right business structure affects your liability, tax obligations, and administrative requirements. The four main options are:
Sole Trader: The simplest and cheapest structure. You operate as an individual and are personally liable for all business debts. Best for freelancers and small service businesses.
Proprietary Limited Company (Pty Ltd): A separate legal entity that limits personal liability. More complex to set up but preferred for businesses with growth ambitions or multiple stakeholders.
Partnership: Two or more people share ownership, profits, and liability. Requires a partnership agreement.
Trust: A trustee holds assets on behalf of beneficiaries. Often used for tax planning and asset protection. More complex and typically requires legal advice to set up.
For most small businesses and startups, a sole trader or Pty Ltd company is the most practical starting point.
Step 2: Apply for an Australian Business Number (ABN)
An ABN is an 11-digit identifier used in all dealings with government agencies and in business transactions.
Cost: Free. Where to Apply: Australian Business Register at abr.gov.au. Requirement: You need a Tax File Number (TFN) to apply. Processing Time: ABNs are usually issued immediately online.
You need an ABN to invoice clients, register for GST, open a business bank account, and claim business expense deductions.
Step 3: Register Your Business Name
If you plan to trade under a name different from your own legal name, you must register it with the Australian Securities and Investments Commission (ASIC).
Cost: AUD $44 for one year or AUD $102 for three years (2026 rates). Where to Register: register.business.gov.au.
Important: Registering a business name does not provide trademark protection. For trademark rights, register separately with IP Australia at AUD $330 per class of goods or services.
Step 4: Register a Company with ASIC
If you are setting up a Pty Ltd company, registration with ASIC is required.
Registration Fee: AUD $576 (2026). Requirements: At least one Australian resident director, a registered office address, and either a company constitution or reliance on the Replaceable Rules under the Corporations Act 2001.
After registration, you receive an Australian Company Number (ACN), which you then use to apply for an ABN for the company.
Step 5: Register for GST and Tax Obligations
GST registration is mandatory if your business earns or expects to earn AUD $75,000 or more in annual turnover.
Cost: Free. Where to Register: ATO Business Portal or through your accountant. Obligation: Lodge a Business Activity Statement (BAS) monthly or quarterly.
Additional registrations to consider: PAYG Withholding if you hire employees. Payroll Tax (state-based, applies above certain wage thresholds). Fringe Benefits Tax if you provide non-cash benefits to staff.
Annual Compliance Costs to Budget For
Once your business is operating, expect these ongoing annual costs:
ASIC Annual Review Fee (companies): AUD $310 per year. Business Name Renewal: AUD $44 per year. Accounting and Bookkeeping: AUD $2,000 to $8,000 per year for a small business. Public Liability Insurance: AUD $500 to $2,000 per year depending on industry. Workers’ Compensation Insurance: Required if you employ staff (cost varies by state and industry).
Engaging an accountant for initial setup advice typically costs AUD $500 to $1,500 and can save significant money and time over the life of your business.