Proprietary Limited or Unlimited Company
Under Australian law, a proprietary limited company, abbreviated as 'Pty Ltd' is a business structure that has at least one shareholder with a limited number of shares. Its counterparts include the public Limited company (Ltd.) and the Unlimited Proprietary company (Pty.) with a share capital.
Under the governing Australian Corporations Act 2001 (Cth), a proprietary company must either be:
- Proprietary Limited (Pty Ltd) company, limited by shares, where shareholders are afforded more protection when it comes to the level of liability that they face for company debts; or
- Unlimited Proprietary (Pty) company with a share capital, similar to its limited company (Ltd., or Pty. Ltd.) counterpart, but where the members or shareholders liability is not limited.
The proprietary limited or unlimited company must have at least one shareholder and must have no more than 50 non-employee shareholders and at least one director who must live in Australia. A secretary can be appointed (Sect. 204A), that must be at least 18 years of age. One person may simultaneously hold the positions of company director and secretary.
Proprietary limited companies are also classified as "large" or "small". A proprietary company is classified as small only if it meets at least two of the following criteria:
- It has assets of less than $12.5 million at the end of a financial year.
- It has fewer than 50 employees at the end of a financial year.
- It has a gross operating revenue of less than $25 million for the financial year.
Most large proprietary companies have to lodge audited accounts. Small proprietary companies only have to prepare audited financial statements if ordered to do so by the Australian Securities and Investments Commission (ASIC) or members holding five percent of voting shares and, in some cases, if controlled by a foreign company.
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