Insight
Company vs Corporation: What the Words Mean in Australia
21 Sep 2026
In short
In Australia, "company" is the legal term used in the Corporations Act 2001 for an entity registered with ASIC. "Corporation" is a broader term that includes companies but also other bodies corporate. Australian businesses do not incorporate as a "corporation" — they register a company, most commonly a proprietary limited (Pty Ltd) company.
Next step: Choosing a structure? See business structures or compare Pty Ltd and sole trader.
"Corporation" is an American word that has followed American business content into Australian searches. It has a meaning here, but it is not the label you register under, and confusing the two leads people to look for structures that do not exist in Australia — like the LLC.
What is a company in Australia?
A company is a body corporate registered under the Corporations Act 2001 (Cth) and administered by ASIC. It is a separate legal entity from its shareholders and directors: it can own property, enter contracts, sue and be sued, and it continues to exist regardless of changes in ownership. On registration it receives an Australian Company Number (ACN).
What is a corporation in Australia?
A corporation is a broader category. In Australian law it means a body corporate — any entity with separate legal personality — which includes companies registered under the Corporations Act, but also incorporated associations, statutory corporations created by legislation, corporations registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006, and foreign bodies corporate.
The term also carries constitutional weight. The Commonwealth's power to legislate for "trading or financial corporations formed within the limits of the Commonwealth" is the basis on which much federal regulation — including most of the Fair Work Act — applies to Pty Ltd companies. That is why whether an entity is a "constitutional corporation" genuinely matters for employment and workplace obligations.
Company vs corporation: the practical differences
| Company | Corporation | |
|---|---|---|
| Meaning | An entity registered with ASIC under the Corporations Act | Any body corporate with separate legal personality |
| Scope | Narrower — a subset of corporations | Broader — includes companies, incorporated associations, statutory bodies |
| How you create one | Register with ASIC; receive an ACN | Depends on the type — ASIC, a state regulator, or an Act of Parliament |
| Used in Australian registration | Yes — this is what you register | No — you do not register "a corporation" |
| Common usage | Standard Australian term | Often used loosely to mean a large company, or imported from US usage |
Types of Australian company
- Proprietary limited (Pty Ltd) — the standard private company. Up to 50 non-employee shareholders, cannot raise funds from the public without a disclosure document, reduced reporting obligations. This is what the overwhelming majority of Australian businesses use.
- Public company (Ltd) — can have unlimited shareholders and raise capital from the public. Heavier governance, disclosure and audit obligations. See Pty Ltd vs Ltd.
- Company limited by guarantee — used by not-for-profits and charities; members guarantee a nominal amount rather than holding shares.
- Unlimited company and no liability company — rare; the latter is confined to mining exploration.
Why "corporation" is not on your ASIC registration
When you register with ASIC you choose a company name ending in an acceptable legal element — "Pty Ltd", "Pty Limited", "Ltd" or "Limited". "Corporation", "Corp" and "Inc" are American designations and are not Australian legal elements. A name may include the word "Corporation" as part of its trading identity, but the legal status still comes from "Pty Ltd" or "Ltd" at the end.
The same applies to "Inc" (a US corporation) and "LLC" (a US limited liability company). Neither exists as an Australian structure. Australian businesses that want limited liability register a Pty Ltd company.
Why the distinction matters commercially
- Contracts. Name the counterparty correctly, with its ACN or ABN. "ABC Corporation" with no ACN may be a trading name, not a legal entity — and you cannot enforce a contract against a trading name. Check the ASIC company register before signing.
- Employment law. Whether the employer is a constitutional corporation determines whether the national workplace relations system applies, including the National Employment Standards.
- Director duties. Directors of a company registered under the Corporations Act owe statutory duties under sections 180 to 184 — see director duties. Officers of other corporate forms may owe duties under different legislation.
- Foreign entities. A US corporation or LLC carrying on business in Australia generally needs to register as a foreign company with ASIC and receive an ARBN. Doing business through an unregistered foreign entity creates real exposure.
- Tax. Australian companies pay company tax at 25% (base rate entities) or 30%. US pass-through treatment for an LLC has no Australian equivalent, which is a frequent source of costly structuring mistakes.
Frequently asked questions
Is a company the same as a corporation in Australia?
Not exactly. Every company registered with ASIC is a corporation, but not every corporation is a company — incorporated associations and statutory bodies are corporations too. In everyday Australian business language the words are used interchangeably, but "company" is the correct legal term.
Can I register a corporation in Australia?
No. You register a company with ASIC — usually a proprietary limited (Pty Ltd) company. "Corporation", "Corp" and "Inc" are not Australian legal elements.
What does Pty Ltd stand for?
Proprietary limited. "Proprietary" means it is a private company with restrictions on raising funds publicly; "limited" means shareholder liability is limited to amounts unpaid on their shares.
What is a constitutional corporation?
A trading or financial corporation within the meaning of the Commonwealth Constitution. Most Pty Ltd trading companies qualify, which is why the federal workplace relations system applies to them.
Does a US corporation need to register in Australia?
If it carries on business in Australia, it generally must register as a foreign company with ASIC and obtain an ARBN. Many businesses instead establish an Australian subsidiary.
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