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A proprietary company, the characteristic of which is abbreviated as "Pty", is a form of
privately held company A privately held company (or simply a private company) is a company whose Stock, shares and related rights or obligations are not offered for public subscription or publicly negotiated in their respective listed markets. Instead, the Private equi ...
in
Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
,
Namibia Namibia, officially the Republic of Namibia, is a country on the west coast of Southern Africa. Its borders include the Atlantic Ocean to the west, Angola and Zambia to the north, Botswana to the east and South Africa to the south; in the no ...
and
South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. Its Provinces of South Africa, nine provinces are bounded to the south by of coastline that stretches along the Atlantic O ...
that is either limited or unlimited. However, unlike a
public company A public company is a company whose ownership is organized via shares of share capital, stock which are intended to be freely traded on a stock exchange or in over-the-counter (finance), over-the-counter markets. A public (publicly traded) co ...
there are, depending on
jurisdiction Jurisdiction (from Latin 'law' and 'speech' or 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, the concept of jurisdiction applies at multiple level ...
, restrictions on what it can and cannot do. In Australia, a proprietary company is defined under section 45A(1) of the
Corporations Act 2001 The ''Corporations Act 2001'' is an Act of the Parliament of Australia, which sets out the laws dealing with business entities in Australia. The company is the Act's primary focus, but other entities, such as partnerships and managed invest ...
(Cth). The Act puts certain restrictions on proprietary companies such as not permitting them to have more than 50 members (
shareholder A shareholder (in the United States often referred to as stockholder) of corporate stock refers to an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the ...
s). Another important restriction relates to
fundraising Fundraising or fund-raising is the process of seeking and gathering voluntary financial contributions by engaging individuals, businesses, charitable foundations, or governmental agencies. Although fundraising typically refers to efforts to gathe ...
. A proprietary company must not engage in fundraising that would require a disclosure document such as a prospectus, an offer information statement, or a profile statement to be issued (sec.113(3)). The Act states in which circumstances a company must issue a prospectus when attempting to raise funds. This means that a proprietary company must not offer its shares to the public. Section 45A of the Act also distinguishes proprietary companies as either "large proprietary" or "small proprietary". The differences here relate to issues such as operating
revenue In accounting, revenue is the total amount of income generated by the sale of product (business), goods and services related to the primary operations of a business. Commercial revenue may also be referred to as sales or as turnover. Some compan ...
, consolidated gross
assets In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can b ...
, and the number of employed persons. Large proprietary companies are required to appoint an
auditor An auditor is a person or a firm appointed by a company to execute an audit.Practical Auditing, Kul Narsingh Shrestha, 2012, Nabin Prakashan, Nepal To act as an auditor, a person should be certified by the regulatory authority of accounting an ...
and lodge appropriate
financial statement Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...
s with the
Australian Securities & Investments Commission The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...
.


Proprietary limited or unlimited company

Under Australian law, a ''proprietary limited
company A company, abbreviated as co., is a Legal personality, legal entity representing an association of legal people, whether Natural person, natural, Juridical person, juridical or a mixture of both, with a specific objective. Company members ...
'' (abbreviated as 'Pty Ltd') is a business structure that has at least one
shareholder A shareholder (in the United States often referred to as stockholder) of corporate stock refers to an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the ...
and up to 50, where the liability of shareholders is limited to the value of shares. Its counterparts include the
public limited company A public limited company (legally abbreviated to PLC or plc) is a type of public company under United Kingdom company law, some Commonwealth of Nations, Commonwealth jurisdictions, and Republic of Ireland, Ireland. It is a limited liability co ...
(Ltd) and the Unlimited Proprietary company (Pty) with a share capital. Under the Australian
Corporations Act 2001 The ''Corporations Act 2001'' is an Act of the Parliament of Australia, which sets out the laws dealing with business entities in Australia. The company is the Act's primary focus, but other entities, such as partnerships and managed invest ...
(Cth), a proprietary company must be either – *Proprietary Limited (Pty Ltd) company, limited by shares, where
shareholders A shareholder (in the United States often referred to as stockholder) of corporate stock refers to an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the ...
are afforded more protection when it comes to the level of liability 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, no more than 50 non-employee shareholders, and at least one director who must live in Australia. A secretary can be appointed (sec.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:Are you a large or small company
Australian Securities & Investments Commission The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...
*It has assets of less than $25 million at the end of a financial year. *It has fewer than 100 employees at the end of a financial year. *It has a gross operating revenue of less than $50 million for the
financial year A fiscal year (also known as a financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. La ...
. 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
Australian Securities & Investments Commission The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...
or members holding five percent of voting shares and, in some cases, if controlled by a foreign company.


Company names

Proprietary companies have the word "Proprietary" in their name, thus Relays Proprietary Limited, abbreviated to Relays Pty Ltd or Relays P/L.


Other countries

* In
Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...
, a proprietary company name would be named "Relays (Private) Limited" abbreviated to "Relays Pte Ltd". * In
Namibia Namibia, officially the Republic of Namibia, is a country on the west coast of Southern Africa. Its borders include the Atlantic Ocean to the west, Angola and Zambia to the north, Botswana to the east and South Africa to the south; in the no ...
and
South Africa South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. Its Provinces of South Africa, nine provinces are bounded to the south by of coastline that stretches along the Atlantic O ...
, the name of a private company ends with "(Pty) Ltd" and that of a public company ends with "Ltd".


Company number

To help identify companies more uniquely and concisely, many countries have a
company number Companies House is the executive agency of the British Government that maintains the register of companies, employs the company registrars and is responsible for incorporating all forms of companies in the United Kingdom. Prior to 1844, no c ...
which does not change if the company changes its name. *
Australian Company Number An Australian Company Number (usually shortened to ACN) is a unique identifier required by every company registered under Australia’s ''Corporations Act 2001'' (Cth). The ACN is a nine-digit number issued by the Australian Securities & Investme ...


See also

*
Australian company law Australian corporations law has historically borrowed heavily from UK company law. Its legal structure now consists of a single, national statute, the Corporations Act 2001. The statute is administered by a single national regulatory authority ...
*
South African company law South African company law is that body of rules which regulates corporations formed under the Companies Act. A company is a business organisation which earns income by the production or sale of goods or services. This entry also covers rules by ...


References

{{DEFAULTSORT:Proprietary Company Types of business entity Australian corporate law