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3. What is a Pty Ltd Company?


What exactly is a Pty Ltd Company and why is it the most common form of company in Australia?


The letters 'PTY LTD' are an abbreviation of PROPRIETARY LIMITED. The 'proprietary' means the company is privately owned. Its shares are not listed on the Australian Stock Exchange and can't be traded by members of the public. The 'limited' means the company's shareholders have only a limited liability to pay its debts.


This is the most popular form of company for small- to medium-enterprises in Australia and is overwhelmingly the most popular form of company registered in this country. Of course, there are some rules that Proprietary Limited companies must follow.

A PTY LTD company must have at least one director who lives in Australia, for example. Restrictions also apply to the number of shareholders that a Pty Ltd company is allowed to have. It must have at least one shareholder but it cannot have more than 50 shareholders who are not employees.

It doesn't have to have a company secretary but if it does then at least one must live in Australia.

Its registered office must also have a physical or street address within Australia. A Post Office Box is not acceptable.

The main advantage of forming a Pty Ltd company is that you only need one director and one shareholder and they can. in fact, be the same person. It's a great way to get the tax and liability advantages of a company structure, even when you are starting a small business.




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