Since the new company which should be registered before the Australian Securities and Investments Commission (ASIC) will not require to raise capital from the public and the participation in the same will be limited only to the family members, it is ideal to register it as a ‘Proprietary Limited’ or ‘Pty Ltd’.
Section 45A of the Corporations Act, 2001 (Bostock, 2012) envisages that:
Proprietary company should include the following:
- limited by number of shares; or unlimited company having fixed share capital;
- the number of non-employee shareholders cannot exceed 50;
- reduced disclosure requirements in compliance with Chapter 6D.
Further, in current scenario, the proprietary company will be incorporated as a Small Proprietary Limited (Www5.austlii.edu.au, 2018) as it satisfies 2 or more conditions indicated in Sect 45A:
(a) Total gross revenue of this new company by the end of the 1st financial year will be $10 million, which is below the prescribed threshold of $25 million;
(b) Total gross assets by the end of 1st financial year will be $5 million, which is below the limit indicated in this section as $12.5 million;
(c) Total number of full-time employees will be 20 by the end of 1st financial year, which must be less than 50.
After the completion of 5 years, the company may be converted to a Large Proprietary Limited (Chew, 2014) as it is expected to satisfy at least 2 conditions indicated in Sect 45A for a Large Proprietary:
(a) Total revenue of company is expected to be $26 million, which is more than the limit prescribed in this section as $25 million;
(b) Total gross assets is expected to be $13 million, which is more than the limit of $12.5 million;
(c) Total number of employees are expected to be 66.
Even if 2 conditions are satisfied, the company may be converted from a Small Proprietary to a Large Proprietary.
This was also discussed in Workers Compensation Nominal Insurer v Brasnovic  NSWDC 131.
As regards the company name, it may include the terms ‘AZNAC’ and ‘COFFEE’ which are memorable and descriptive in addition to the type of company – Proprietary Limited or Pty Ltd.
Bostock, T. (2012). The Corporations Act 2001. Amicus Curiae, 2002.
Chew, C. (2014). Business law guidebook. South Melbourne, Victoria: Oxford University Press.
austlii.edu.au. (2018). Corporation act 2001 - Sect 45A Proprietary companies. [online] Available at: https://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s45a.html