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PTY LTD set up cost - anyone know?

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Old 17-05-12
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Default PTY LTD set up cost - anyone know?

I have been trying to get costings from accountants regarding setup costs for a PTY LTD structure. I've been told by some people who have set up such structures that it costa about $400. I went to one accountant who gave me a piece of paper which says it costs $2000. Now for that I would say no way.

I have since tried to get figures form other accountants by e-mail. No luck, one saying I would have come in and pay $150 per hour for a consultation.

Is it common practice to not give a set up cost so a prospective customer can make a decision? Surely, I shouldn't have to pay a consultation fee for what I know I need to then get a figure that I would be up for. If I walk into a shop I can see the price before I commit. All I want is too know what the cost might be to factor it into startup costs.

Any help would be much appreciated. Also if you know good people in the Melbourne area that could be considered would be good, too.

Thanks.


Last edited by Alex Benedict; 17-05-12 at 10:54 AM. Reason: spelling
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Old 17-05-12
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Default Re: PTY LTD set up cost - anyone know?

Hi Alex,

The cost of around "$400" is if you do your Pty Ltd registration yourself, through ASIC. You can find the ASIC fees/forms here.

Accountants may wish to consult first, to ensure that a company (e.g. a Pty Ltd) is the right structure for you and your circumstances. One of the members on here that I know of offers these services at reasonable pricing, and you can even order online if you know the structure/entity type you are after. (Their website also includes information to help understand the different entity types and you can find their fees here).

Hope this helps

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Old 17-05-12
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Default Re: PTY LTD set up cost - anyone know?

The ASIC fee to incorporate a Pty Ltd is $426. That's all it will cost you if you want to DIY.

The next step up is to go semi-DIY and use an online incorporator such as ecompanies who will have a step by step form to fill out online, get you registered (pretty much immediately) give you a nice shiny (electronic) constitution, director consent forms, etc etc. They'll charge anywhere from $50 to $200 on top of the ASIC fee.

If you want hard copy company registers and a company seal (does anyone these days?) expect to pay a bit more.

Accountants can take it off your hands and do it all for you of course. AFAIK they'll charge anywhere from $400 to $800 on top of the ASIC fee but generally they do ABN, TFN etc etc as well. There's a few accountants on here who can tell me if I'm off the mark in terms of what they're charging these days.

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Default Re: PTY LTD set up cost - anyone know?

Hi Alex,

Supporting what Jacqui has said, your choices boil down to two options:
1. Do it yourself ($400 for the forms + your time); or
2. Pay someone else to do it for you.

The trick is understanding the true cost of doing it yourself (as there is a lot more than just filling in a few forms for the registration - business constitutions, etc). Added to this is are the risks you run if you get something wrong.

All up, it may be easier to have someone else create all the bits you need for you and make sure that the Pty Ltd structure is right for you (such at tax implications, WorkCare, etc) that you will have as a company owner. A good accountant will be able to help you with all of these questions.

When I set up my company, it cost about $1k which I thought was reasonable for the effort involved and the risk I would be taking by doing it myself and then finding I have done it wrong or not got the outcome I was expecting.

Trust this helps.

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Default Re: PTY LTD set up cost - anyone know?

Quote:
Originally Posted by JacquiPryor View Post
Hi Alex,

The cost of around "$400" is if you do your Pty Ltd registration yourself, through ASIC. You can find the ASIC fees/forms here.

Accountants may wish to consult first, to ensure that a company (e.g. a Pty Ltd) is the right structure for you and your circumstances. One of the members on here that I know of offers these services at reasonable pricing, and you can even order online if you know the structure/entity type you are after. (Their website also includes information to help understand the different entity types and you can find their fees here).

Hope this helps
Hi Jacqui,

Thanks for the information. I will have to read into it and consider what to do.

Cheers..

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Default Re: PTY LTD set up cost - anyone know?

Hi Rodd and Victor,

You guys along with Jacqui have made it clearer what the costs would be. I thank you for your replies. I'll have a sit down and think it over, but as you say not doing it right could cost me more.

I am primarily concerned about reducing liability working with affiliated businesses and for public liability for example.

Thanks again.

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Old 17-05-12
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Default Re: PTY LTD set up cost - anyone know?

Hi Alex,

Firstly I run my own accountancy practice in the eastern suburbs and would be happy to offer you a inital consultation at no charge.

Secondly don't fall into the trap of setting up a company just because others have done it and they say that is what you should do. You need to look at your own position and use the structure that is right for you. This maybe a company, maybe a trust or it may simply be as a sole trader. Each has its pros and cons, and each has different costs and benefits.

Thirdly, you talk about reducing liability and while a company may offer some protection, as a director you can still be held responsible for what the company does and the debts incurred.

Take a step back and sit down with someone, be it myself or another accountant, and make sure you are using the right structure for the business you are setting up.

All the best with your venture, I'll PM you with my contact details if you wish to discuss further.

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Default Re: PTY LTD set up cost - anyone know?

my accountant, (Xavier from Axle Edge) did a complete setup for me, and actually turned it around within about 3 days, signed, stamped, full binders and everything.

for a company, it was around 1500, and for a trust, slightly less.

Obviously it depends on what you want to do.. if you don't need the trust, then just do the company..


i would echo chris brodie - make sure teh structure is right for your circumstances. for instance, a discretionary trust is ideal in my situation, but I have an associate who has a unit-trust to run his business.. and each of the owners own their units within their own structure

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Default Re: PTY LTD set up cost - anyone know?

An accountant is the expensive way. Find a a law firm that does does commercial work. Most offer fixed price for this type of thing and should be happy to quote over the phone.

It cost me only around $1500 to set up the company plus all the legals for buying the business, transfer of everything that needed transferring.

Even my accountant suggested the lawyer as they could do it more cheaply, as this is what lawyers do.

Accountants look at numbers.

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Default Re: PTY LTD set up cost - anyone know?

Quote:
Originally Posted by King View Post
An accountant is the expensive way. Find a a law firm that does does commercial work. Most offer fixed price for this type of thing and should be happy to quote over the phone.

It cost me only around $1500 to set up the company plus all the legals for buying the business, transfer of everything that needed transferring.

Even my accountant suggested the lawyer as they could do it more cheaply, as this is what lawyers do.

Accountants look at numbers.
That's quite interesting. I used to do the opposite for run of the mill incorporations - tell clients to get their accountants to do it as they could usually do it for less and tick the right boxes on the ABN / GST registration stuff etc etc at the same time.

Many law firms simply use company incorporators like Castle Corporate or some such to do it and add a bit of margin on top.

Then again the $1500 for what you got sounds like a steal.

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