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A proprietary company, (abbreviated as 'Pty.'), is a form of
privately held company A privately held company or private company is a company which does not offer or trade its company stock In finance, stock (also capital stock) consists of all of the shares In financial markets A financial market is a market in whi ...
in
Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...

Australia
and
South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. With over 60 million people, it is the world's 23rd-most populous nation and covers an area of . South Africa has three capital citie ...

South Africa
that is either limited or unlimited. However, unlike a
public company A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a company whose ownership is organized via shares of share capital, stock which are intended to be freely traded on a stock ...
there are, depending on
jurisdiction Jurisdiction (from Latin Latin (, or , ) is a classical language A classical language is a language A language is a structured system of communication Communication (from Latin ''communicare'', meaning "to share" or "to be i ...
, 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 (Cth) (the Corporations Act, or CA 2001) is an Act of the Commonwealth of Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the A ...
(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 a corporation is an individual or legal entity (such as another corporation, a body politic, a Trust law, 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 ...

fundraising
. A proprietary company must not engage in fundraising that would require a disclosure document such as a
prospectus Prospectus may refer to: * Prospectus (finance), also called a ''concept note'' * Prospectus (university) * Prospectus (book) * Prospectus (album), ''Prospectus'' (album), a 1983 album by saxophonist Steve Lacy * Parkland College's newspaper {{dis ...
, 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 Accounting or Accountancy is the measurement ' Measurement is the number, numerical quantification (science), quantification of the variable and attribute (research), attributes of an object or event, which can be used to comp ...
, consolidated gross
assets In financial accounting Financial accounting is the field of accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such as ...
, and the number of employed persons. Large proprietary companies are required to appoint an
auditorAn auditor is a person or a firm appointed by a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal or a mixture of both, wit ...
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 and 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 ...
(ASIC).


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 people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common pu ...

company
'' (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 a corporation is an individual or legal entity (such as another corporation, a body politic, a Trust law, 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 A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a company whose ownership is or ...
(Ltd) and the Unlimited Proprietary company (Pty) with a share capital. Under the Australian
Corporations Act 2001 The Corporations Act 2001 (Cth) (the Corporations Act, or CA 2001) is an Act of the Commonwealth of Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the A ...
(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 a corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal en ...
are afforded more protection when it comes to the level of
liability Liability may refer to: Law * Legal liability, in both civil and criminal law ** Public liability, part of the law of tort which focuses on civil wrongs ** Product liability, the area of law in which manufacturers, distributors, suppliers, retai ...
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: Australian Securities and Investments Commission
/ref> *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. 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 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 ...
(ASIC) 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 a sovereign state, sovereign island city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...

Singapore
, a proprietary company name would be named "Relays (Private) Limited" abbreviated to "Relays Pte Ltd". * In
South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. With over 60 million people, it is the world's 23rd-most populous nation and covers an area of . South Africa has three capital citie ...

South Africa
, 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 which does not change if the company changes its name. *
Australian Company Number An Australian Company Number (usually shortened to ACN) is a unique nine-digit number issued by the Australian Securities and Investments Commission The Australian Securities and Investments Commission (ASIC) is an independent commission of t ...
( ACN)


See also

* Australian company law *
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 wh ...


References

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