Types of Companies in Australia: A Guide to Every Structure

When most Australian business owners say they want to ‘set up a company’, they mean a Pty Ltd. That’s the right answer for most situations — but it’s one of five distinct company types recognised under Australian law, each with different rules around liability, ownership, fundraising, tax treatment, and compliance obligations.

Choosing the wrong type, or not fully understanding the one you’ve registered, creates problems that are costly to fix. This guide covers every type of Australian company in plain language so you can make an informed decision before you register.

How Australian Company Law Works

All companies in Australia are governed by the Corporations Act 2001 — a single piece of federal legislation that applies uniformly across every state and territory. The Act is administered by the Australian Securities and Investments Commission (ASIC). As ASIC explains, under the Corporations Act companies can be classified by the liability of their members and whether they are public or proprietary — and the type of company affects issues like liability, fundraising, and reporting requirements.

When you register a company with ASIC, it becomes a separate legal entity — distinct from its directors and shareholders. The company can own assets, enter contracts, employ staff, and be sued in its own name, independently of the people who own and run it. This legal separation is the defining feature of a company and the primary reason most business owners choose one over a sole trader or partnership structure.

Every registered company receives an Australian Company Number (ACN) from ASIC. If the company also registers for tax with the ATO, it will have an ABN — which is a different identifier used for tax and GST purposes. The two are frequently confused. Our ABN vs ACN guide explains the distinction clearly.

All Australian Company Types at a Glance

Here is how the five main company types compare:

The sections below cover each type in detail. For most Australian small business owners, the Pty Ltd is the only type that’s relevant — but understanding what the others are and when they apply prevents costly misunderstandings.

Proprietary Limited Company (Pty Ltd)

The Pty Ltd — proprietary limited company — is by far the most common company structure in Australia. It is the default choice for small and medium-sized businesses, family companies, startups, and most privately held operations. If someone in Australia says they have ‘a company’, this is almost certainly what they mean.

A Pty Ltd is privately held. It cannot offer shares to the general public, cannot list on the ASX, and is limited to a maximum of 50 non-employee shareholders. It must have at least one director who is ordinarily resident in Australia.

Key features of a Pty Ltd company:

• Shareholders’ liability is limited to any unpaid amount on their shares — personal assets are protected in most circumstances
• The company pays a flat 25% corporate tax rate on profits, provided its aggregated annual turnover is under $50 million (the base rate entity threshold)
• Small proprietary companies — those with consolidated revenue under $50 million, gross assets under $25 million, and fewer than 100 employees — have significantly reduced financial reporting obligations and are generally not required to lodge audited financial statements with ASIC
• An annual ASIC review fee of $329 (from 1 July 2025) is payable to keep the company registered
• The company must lodge an annual tax return with the ATO and can distribute franked dividends to shareholders where tax has been paid at company level
• Profits retained in the company are taxed at the 25% corporate rate — creating genuine tax planning opportunities that are not available to sole traders or partnerships

For the overwhelming majority of Australian small business owners weighing up their options, the comparison that matters most is sole trader versus Pty Ltd. Our guide on sole trader vs company covers that comparison in full, including a worked tax example and a side-by-side comparison table.

Small vs Large Proprietary Company: What’s the Difference?

Not all Pty Ltd companies face the same compliance obligations. The Corporations Act distinguishes between small and large proprietary companies based on three thresholds: consolidated revenue, gross assets, and number of employees.

A company is classified as a small proprietary company if it meets at least two of the following criteria:

• Consolidated revenue under $50 million
• Consolidated gross assets under $25 million
• Fewer than 100 employees

Small proprietary companies enjoy significantly reduced reporting requirements — they are generally not required to prepare or lodge audited financial statements with ASIC unless directed to do so by ASIC itself or required by their own constitution.

Large proprietary companies exceed at least two of the three thresholds above. They must prepare and lodge audited financial reports annually with ASIC — similar obligations to those that apply to public companies. If your business is growing toward these thresholds, it is worth understanding the compliance step-change that comes with crossing them.

Public Company (Limited by Shares)

A public company limited by shares — denoted by ‘Ltd’ rather than ‘Pty Ltd’ — can offer its shares to the general public and list on the Australian Securities Exchange (ASX). It has no upper limit on the number of shareholders and can raise capital from institutional and retail investors through a formal prospectus process.

In exchange for this access to public capital, public companies face significantly more stringent compliance obligations than proprietary companies:

• Annual general meetings (AGMs) are mandatory
• Audited financial statements must be prepared and lodged with ASIC each year
• Listed companies must also comply with ASX Listing Rules and continuous disclosure obligations — promptly notifying the market of any information that could materially affect their share price
• A public company must have an auditor at all times
• Listed companies are expected to have a majority of independent non-executive directors and a formal audit committee

Most businesses that begin as a Pty Ltd and grow substantially may eventually convert to a public company structure when they pursue an ASX listing or seek to raise capital from the public market. This conversion involves regulatory steps and is typically managed with legal and financial advisors. For virtually all Australian small and medium business owners, a public company structure is neither necessary nor appropriate.

Company Limited by Guarantee

A company limited by guarantee is the standard legal structure for charities, not-for-profits, sporting clubs, industry associations, and professional bodies in Australia. It is a distinct and frequently misunderstood company type — and one of the most commonly searched terms in this space. ASIC notes that companies limited by guarantee operate under a three-tier reporting framework based on their revenue and charitable status.

Unlike a company limited by shares, a company limited by guarantee has no shareholders and issues no shares. Instead, it has members who each guarantee to contribute a specified amount — typically a nominal sum between $10 and $100 — to the company’s debts if it is wound up without sufficient funds to meet its liabilities.

In practice, this means members’ financial exposure is limited to that guaranteed amount, which is rarely if ever called upon.

Key characteristics:

• No shareholders — governed by members, not investors
• Cannot pay dividends or distribute surplus funds to members — any surplus must be reinvested in the organisation’s purpose
• Cannot issue shares — no one can profit from selling shares or acquire a controlling financial interest
• Every member is entitled to one vote, regardless of contribution level
• Small companies limited by guarantee with revenue under $250,000 in a financial year have reduced reporting obligations
• If the organisation is a registered charity, it must also comply with the Australian Charities and Not-for-profits Commission Act 2012 and may be exempt from certain Corporations Act obligations that would otherwise apply to public companies
• Registered with ASIC like any other company — receives an ACN and may have ‘Ltd’ in its name, though charities pursuing only charitable purposes may be permitted to omit ‘Limited’ from their name

If you are establishing a not-for-profit and are weighing up a company limited by guarantee against an incorporated association (which is registered at state or territory level rather than federally), the choice depends on your governance needs, whether you operate nationally, and whether you need the legal recognition that comes with federal ASIC registration.

Unlimited Proprietary Company

An unlimited proprietary company is a Pty structure where the shareholders have unlimited personal liability for the company’s debts — similar to a sole trader or partnership, but with the corporate framework intact. The name of an unlimited proprietary company ends in ‘Pty’ without ‘Ltd’, signalling to those dealing with it that limited liability does not apply.

This structure is rare in Australia. It is occasionally used in specific legal and cross-border contexts — for example, where foreign jurisdictions require an unlimited liability entity for regulatory or tax compliance reasons, or in certain professional services contexts.

For virtually all Australian small and medium business owners, an unlimited proprietary company is not a relevant consideration. If you have encountered this structure in a specific context, it warrants specific professional advice.

No Liability Company (NL)

A no liability company is a form of public company created specifically for the Australian mining industry. In an NL company, shareholders with partly paid shares are not legally obligated to pay calls on unpaid capital — but if they choose not to pay, they forfeit those shares. NL companies may or may not be listed on the ASX.

This structure exists because mining exploration is inherently high-risk and capital-intensive. The NL structure allows companies to raise funds through partly paid shares without exposing investors to unlimited calls if the project underperforms. Outside the mining sector, it has no practical relevance.

What Does ‘Ltd’ Mean in a Company Name?

‘Ltd’ stands for ‘limited’ — specifically, that the liability of the company’s members is limited. The suffix in a company name tells you both its structure and its liability profile:

• Pty Ltd: Proprietary Limited – A private company, max 50 non-employee shareholders, cannot raise from the public
• Ltd: Limited – A public company that can offer shares to the public and has no shareholder cap
• Pty: Without ‘Ltd’ – An unlimited proprietary company where members’ liability is unlimited
• NL: No Liability – A public company in the mining sector where shareholders are not liable for unpaid calls on their shares
• Ltd may be omitted: Companies limited by guarantee pursuing only charitable purposes may apply to ASIC to omit ‘Limited’ from their registered name

Getting the suffix right on invoices, contracts, and ASIC communications matters — using ‘Pty Ltd’ for a company registered as ‘Ltd’ (or vice versa) is a compliance error that creates confusion and potential legal issues.

Pty Ltd vs Public Company: Side-by-Side Comparison

The private versus public distinction is the one most commonly confused by Australian business owners. Here’s a direct comparison:

Which Company Type Is Right for Your Business?

For most Australian business owners, the decision is straightforward:

• Starting or growing a private business → Pty Ltd
• Running a not-for-profit, charity, sporting club, or industry association → Company limited by guarantee
• Seeking to list on the ASX or raise capital from the general public → Public company (Ltd)
• Operating in the mining sector with partly paid shares → No liability company (NL)
• Specific cross-border or legal context requiring unlimited liability → Unlimited proprietary company (Pty)

Before you register, it is also worth considering whether a company is the right structure at all — or whether a trust, partnership, or sole trader arrangement better suits your situation and your stage of business. If you are weighing a company against a trust structure, our trust vs company guide covers that comparison in depth.

At KSH Tax, we are ASIC registered agents (Reg Agent No. 52195), CPA Australia members, and TPB-registered tax agents. We handle company registration end-to-end — structure advice, ACN and ABN registration, GST setup, and ongoing compliance. Getting the structure right at the start saves significant cost and time later.

Ready to Register? What Comes Next

Once you’ve identified the right company type, the registration process involves ASIC registration, an ACN, setting up your ABN and GST registration, appointing directors and shareholders, and deciding on a constitution or relying on the replaceable rules under the Corporations Act. Our step-by-step guide on how to register a company in Australia walks through every step, including current ASIC fees and timelines.

Frequently Asked Questions

What is the most common type of company in Australia?

The proprietary limited company (Pty Ltd) is by far the most common company type in Australia. It accounts for the vast majority of registered companies and is the standard structure for small and medium-sized private businesses. It offers limited liability protection, a flat 25% corporate tax rate for eligible companies, and a significantly simpler compliance regime compared to a public company.

What is a company limited by guarantee in Australia?

A company limited by guarantee is a company type with no shareholders — only members who each guarantee to contribute a fixed, usually nominal amount (typically $10–$100) to the company’s debts if it is wound up. It is the standard legal structure for charities, not-for-profits, sporting clubs, professional associations, and industry bodies in Australia. Any surplus generated must be reinvested in the organisation’s purpose — profits cannot be distributed to members.

What is the difference between Pty Ltd and Ltd in Australia?

Pty Ltd denotes a proprietary limited company — a private company that cannot offer shares to the public and is capped at 50 non-employee shareholders. Ltd denotes a public company that can raise capital from the general public, list on the ASX, and has no shareholder cap. Public companies face significantly greater compliance obligations, including mandatory AGMs, audited financial statements, and for listed companies, continuous ASX disclosure requirements.

What legislation governs companies in Australia?

All Australian companies are governed by the Corporations Act 2001 — federal legislation that applies uniformly across all states and territories. The Act is administered by ASIC, which handles company registration, issues ACNs, enforces director duties and corporate compliance, and maintains the public register of all Australian companies. The Act also sets out the replaceable rules that govern a company’s internal management unless a formal constitution is adopted.