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Setting Up A Pty Limited Company With A Company Formation Service

07th July 2010
By A Ketley in Business Law
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In Australia, you have quite a few alternatives for company formation. You can have a sole proprietorship, a partnership or form a proprietary limited company, that is otherwise known as a Pty Ltd company.

A sole proprietorship or partnership is a really simple model to get your head around, but several people do not have a hint what a Pty Ltd Company is. For that reason, many people look to company formation services to direct them through the pros and cons of company incorporation, to obtain the best form of company for their requirements.

A Pty Ltd company is a officially separate entity with its own legal responsibility. It has shareholders that have limited liability for company debts. So, if a business goes bust, the worst that can occur to a shareholder is that they lose their stake.

Any single individual or a group of people could setup a Pty Ltd company. It is good for start-up business because of this and also as the company survives intact, even if a shareholder dies or files bankruptcy. Even, having this sort of company incorporation provides you greater scope to discover shareholders as even minors could have shares in these companies.

There is a draw back, however. The costs of company incorporation for Pty ltd companies tend to be higher. Also, with more shareholders, business could be slowed down and running costs higher. You will be taxed more heftily with this sort of company, also. It is not so simple to break up Pty ltd firms, because of the involvement of shareholders, also.

Administrators of Pty Ltd companies bear a lot more liability as they have to abide by Corporation Law. They have to ensure all these rules and guidelines are followed, which could take lots of time and effort.

Are Pty Ltd companies worth all the added trouble? Basically put - usually, sure they are. They have much more room for growth and development. New investors are easily attracted once you have this type of company incorporation. So, if you're up for a little additional work and putting in the money to start with, Pty Ltd companies are a sensible option for company formation.

However, due to their complexity, you will be highly advised to look at a company formation service to aid you through all the legal, practical and financial aspects of starting your company. They'll ensure that you have complete compliance with corporate law and even help you with providing the paperwork to make your company incorporation easy.

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