Legal Terms For Branch and Representative Offices In Australia
If you're the head of a overseas company seeking to build business within Australia, there are many issues that should be in the lead of your mind. Perhaps the most crucial of these is that the Corporations Act 2001 (Cth) prohibits foreign companies from doing just that. Certainly, there are exclusions - as the proliferation of overseas companies participating in business in Australia attests to. In this situation, there are two main exceptions. The first is to have a subsidiary in Australia. Based on the anticipated size of your functions, this might be the way to go, but it can be pricey. The choice is enrolling a branch or representative office with the Australian Securities and Investment Commission (ASIC).
But, even before choosing between these entity forms, there are two questions that should be answered. 1. Am I a €foreign corporation'? Any body, whether incorporated or not, which is put together in a territory or place away from Australia is regarded to be a overseas corporation. This is granted a very huge test that should bring about little confusion. 2. Am I €carrying out business'? The Corporations Act only prohibits the act of €carrying out business.' Unlike the initial test, this is slightly more unclear and thus confusing. As a rough guideline, if your company's activities in Australia are being carried out with €sufficient system, repetition or continuity' they will probably be performing business. It really should be observed that there is no prerequisite that the company be creating, or even searching for, a profit from the functions.
On the other hand, a single contract that was sufficient enough might satisfy the regulatory government bodies you were undertaking business. Eventually, there are a variety of reasons - none of which are determinative, but are suggestive - to be looked at. Such as: If the actions are common and repetitive in nature; Are the actions similar to those of other businesses in the same industry; Have the activities been planned, organised, and completed in a business-like manner; Are the plans more long term than provisional; Are the activities commercial, and cannot be described as a hobby?
The Act, however, recognises that corporations may be involved in Australia without undertaking a business. If you're concerned as to which type your corporation comes into, the following actions are presumed not to constitute €carrying out business': is a party to court proceedings, a claim or a dispute in Australia; conducts internal affairs functions in Australia such as directors' meetings;
Keeps a banking account; creates proof of a debt or a charge on property, or secures that debt; subject to some conditions, conducts a remote deal (if completed within 31 days); effects a sale through an independent contractor; or spends funds or holds any property.
But, even before choosing between these entity forms, there are two questions that should be answered. 1. Am I a €foreign corporation'? Any body, whether incorporated or not, which is put together in a territory or place away from Australia is regarded to be a overseas corporation. This is granted a very huge test that should bring about little confusion. 2. Am I €carrying out business'? The Corporations Act only prohibits the act of €carrying out business.' Unlike the initial test, this is slightly more unclear and thus confusing. As a rough guideline, if your company's activities in Australia are being carried out with €sufficient system, repetition or continuity' they will probably be performing business. It really should be observed that there is no prerequisite that the company be creating, or even searching for, a profit from the functions.
On the other hand, a single contract that was sufficient enough might satisfy the regulatory government bodies you were undertaking business. Eventually, there are a variety of reasons - none of which are determinative, but are suggestive - to be looked at. Such as: If the actions are common and repetitive in nature; Are the actions similar to those of other businesses in the same industry; Have the activities been planned, organised, and completed in a business-like manner; Are the plans more long term than provisional; Are the activities commercial, and cannot be described as a hobby?
The Act, however, recognises that corporations may be involved in Australia without undertaking a business. If you're concerned as to which type your corporation comes into, the following actions are presumed not to constitute €carrying out business': is a party to court proceedings, a claim or a dispute in Australia; conducts internal affairs functions in Australia such as directors' meetings;
Keeps a banking account; creates proof of a debt or a charge on property, or secures that debt; subject to some conditions, conducts a remote deal (if completed within 31 days); effects a sale through an independent contractor; or spends funds or holds any property.