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 shares and related rights or obligations are not offered for public subscription or publicly negotiated in the respective listed markets, but rather the company's stock is ...

Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands. With an area of , Australia is the largest country by ...

Namibia Namibia (, ), officially the Republic of Namibia, is a country in Southern Africa. Its western border is the Atlantic Ocean. It shares land borders with Zambia and Angola to the north, Botswana to the east and South Africa to the south and ea ...

and

South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring coun ...

that is either limited or unlimited. However, unlike a

public company A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange ( ...

there are, depending on

jurisdiction Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. J ...

, 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) is an Act of the Parliament of Australia, which sets out the laws dealing with business entities in the Commonwealth of Australia. The company is the Act's primary focus, but other entities, such as partner ...

(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 or partnership) that is registered by the corporation as the legal o ...

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 goods and services related to the primary operations of the business. Commercial revenue may also be referred to as sales or as turnover. Some companies receive rev ...

, 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 ...

, 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 and a ...

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 entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared ...

'' (abbreviated as 'Pty Ltd') is a business structure that has at least one

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 jurisdictions, and the Republic of Ireland. It is a limited liability company whose shares may be fr ...

(Ltd) and the Unlimited Proprietary company (Pty) with a share capital. Under the Australian

(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 is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal ...

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: 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 A fiscal year (or 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. Laws in many ...

. 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

(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 island country and 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 ...

, a proprietary company name would be named "Relays (Private) Limited" abbreviated to "Relays Pte Ltd". * In

and

, 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 company registrars of the United Kingdom, falling under the remit of the Department for Business, Energy and Industrial Strategy. All forms of companies (as permitted by the Companies Act) are i ...

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 & Investm ...

( ACN)

References

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

Proprietary limited or unlimited company

Company names

Other countries

Company number

See also

References