5 Common Mistakes to Avoid When Starting a Company in Australia
Starting a company in Australia is an exciting milestone. It means you’re ready to turn your idea into a real business and build something of your own. But with that excitement also comes responsibility. Many new business owners rush into registration without fully understanding the legal, financial, and tax obligations involved. This often leads to avoidable mistakes—mistakes that can cost you money, time, and even your company’s future.
In this guide, we’ll cover the most common mistakes new company owners make in Australia, and how you can avoid them. Whether you’re setting up in Adelaide, Sydney, Melbourne, Brisbane, Perth, Canberra, Tasmania, or the Gold Coast, this blog will give you the clarity you need to start strong.
1. Choosing the Wrong Business Structure
One of the biggest mistakes entrepreneurs make is registering a company without asking: Is this the right structure for me?
In Australia, you can operate as:
- Sole trader – Simple setup, but you’re personally liable for debts.
- Partnership – Shared responsibility with other people.
- Trust – Good for asset protection, but more complex.
- Company (Pty Ltd) – Separate legal entity, offering liability protection but with more compliance.
Jumping straight into company registration may sound professional, but it’s not always the best fit. For example, a small business with low risk might benefit from being a sole trader first, while a family business might find a trust structure more tax-efficient.
Tip: Always speak to a tax and financial advisor before deciding. The right structure can save you thousands in taxes and future headaches.
2. Not Understanding Director Duties
Becoming a company director in Australia is not just a title—it comes with serious legal responsibilities.
Under the Corporations Act 2001, directors must:
- Act in the best interests of the company.
- Avoid trading while insolvent (running the business when you can’t pay debts).
- Keep proper financial records.
- Ensure compliance with reporting obligations.
Failing to follow these duties can result in personal liability, fines, or disqualification. Many new directors don’t realise that ASIC (Australian Securities & Investments Commission) monitors compliance closely.
Tip: Take time to understand your director responsibilities. An accountant or advisor can guide you to make sure you stay compliant.
3. Forgetting to Register for GST
If your business turnover is expected to exceed $75,000 per year, you must register for GST (Goods and Services Tax).
This is one of the most common mistakes new businesses make—they either delay registration or forget entirely. The result?
- Large unexpected tax bills.
- Missed opportunities to claim GST credits.
- Penalties for late registration.
Even if your turnover is below the threshold, registering early can sometimes be beneficial, especially if you want to claim GST credits on your expenses.
Tip: Work with a tax advisor who can assess your situation and help you register at the right time.
4. Missing ASIC Compliance Deadlines
Registering your company is only the first step. Many owners assume that once they get their ACN (Australian Company Number), the job is done. But ongoing ASIC compliance is just as important.
Your company must:
- Complete an annual review.
- Pay the annual review fee.
- Keep ASIC updated on any changes (directors, shareholders, addresses, etc.).
If you miss deadlines, ASIC can issue fines or even deregister your company. Imagine losing your company name and legal entity just because you forgot to submit a form!
Tip: Set reminders or work with an accountant who can manage ASIC compliance for you. That way, you’ll never miss a deadline.
5. Trying DIY Registration Without Professional Advice
It’s tempting to register your company online yourself. It looks quick and cheap—but in reality, DIY registration often leads to:
- Incorrect company structures.
- Missed tax planning opportunities.
- Incomplete legal documents.
- Costly mistakes that take years to fix.
A chartered tax advisor or accountant doesn’t just fill out forms. They make sure your company is structured correctly from the start, advise you on shareholding, and set you up for long-term growth.
For example, the way you allocate shares can impact:
- Tax obligations.
- Asset protection.
- Future expansion or bringing in investors.
Tip: Think of professional advice as an investment, not an expense. The savings and peace of mind far outweigh the upfront cost.
Extra Mistakes to Watch Out For
Apart from the main five mistakes above, here are a few more traps many new business owners fall into:
- Not separating business and personal finances – Always open a separate company bank account.
- Skipping insurance – Protect your company from risks like liability claims.
- Neglecting a business plan – Without a clear roadmap, growth can stall.
Ignoring digital presence – A professional website and online branding help build trust.
How to Avoid These Mistakes
The best way to avoid these common pitfalls is to get expert help right from the start. At AMA Accountants, we have over 25 years of experience helping businesses across Adelaide, Sydney, Melbourne, Brisbane, Perth, Gold Coast, Canberra, and Tasmania set up the right way.
When you work with us, we handle everything:
- Choosing the best structure for your needs.
- Registering your company with ASIC.
- Applying for your ABN, TFN, and GST (if needed).
- Preparing your company constitution and legal documents.
- Ongoing compliance and tax planning.
That means no guesswork, no missed steps, and no unnecessary risks.
Conclusion – Ready to Secure Your Business Future?
Starting a company is exciting, but managing tax and compliance doesn’t have to be stressful. Whether you’re in Adelaide, Sydney, Melbourne, Brisbane, Perth, Darwin, Canberra, or Tasmania, the right advisor makes all the difference.
At AMA Accountants, we provide:
✔ Tax planning strategies
✔ Compliance and ASIC support
✔ Business structure advice
✔ Growth and profitability planning
Ready to protect your business and maximize savings?
Contact AMA Accountants today and let us handle your tax and financial planning—so you can focus on running your business.
Authored By Amit Chugh
Partner, CPA & Registered Tax Agent
Your Trusted Accountant for Adelaide, Melbourne, Sydney, Brisbane & Across Australia
Amit Chugh is a Partner at The AMA Accountant and a highly respected CPA & Registered Tax Agent with a proven track record of delivering exceptional accounting and taxation services to individuals, businesses, and corporations across Australia.
Amit Chugh is a Partner at The AMA Accountant and a highly respected CPA & Registered Tax Agent with a proven track record of delivering exceptional accounting and taxation services to individuals, businesses, and corporations across Australia.
With over 25+ of professional experience, Amit has helped thousands of clients streamline their finances, optimise tax returns, and ensure full compliance with Australian Taxation Office (ATO) requirements. His client base spans Melbourne, Brisbane, Sydney, Tasmania, Perth, Adelaide, Darwin, Canberra, and regional hubs including Prospect, Modbury, Mawson Lakes, Woodville, Mount Gambier, Victor Harbor, Whyalla, Port Lincoln, Murray Bridge, Port Augusta, Gawler, and Port Pirie.
