Pty Ltd stands for "proprietary limited": a private company limited by shares. It can have no more than 50 non-employee shareholders, cannot offer shares to the public, and needs at least one director who lives in Australia. Australia has no LLC; a Pty Ltd is the closest equivalent. For US tax, a Pty Ltd is not a "per se" corporation, so its US owners can elect how it is classified.
Almost every foreign company that sets up in Australia does it through a "Pty Ltd". This guide explains what the term means, the rules that come with it, and the question US founders ask most: is it the same as an LLC?
What "Pty Ltd" means
Pty Ltd is short for Proprietary Limited. "Proprietary" means it is a private company; "Limited" means it is limited by shares, so each shareholder's liability is limited to the amount unpaid on their shares. The company's name must end with "Pty Ltd" or "Proprietary Limited".
The rules for a proprietary company
- Shareholders: at least one, and no more than 50 who are not employees. A foreign parent company can be the sole shareholder.
- No public offers: it cannot offer its shares to the public.
- Directors: at least one director who ordinarily lives in Australia. Other directors can live anywhere. Every director needs a director ID. See resident director services.
- Secretary: optional, but if appointed, at least one must ordinarily live in Australia.
- Registered office: an address in Australia. See registered office address.
- Numbers: ASIC issues an ACN on registration; the company then applies for an ABN and TFN.
- Annual obligations: an ASIC annual review fee ($342 from 1 July 2026), a solvency resolution, and a company tax return. Financial reports must be lodged with ASIC if the company is large, or small but foreign-controlled and not covered by relief; see financial reporting.
Is there an LLC in Australia?
No. Australian company law has no limited liability company (LLC) form. ASIC's company types are proprietary or public companies, limited by shares, unlimited, limited by guarantee, or no liability. For a business owner who would use an LLC in the US, the closest Australian equivalent is a Pty Ltd company limited by shares: it gives limited liability and simple private ownership. Limited partnerships exist under state laws, and incorporated limited partnerships are used mainly for venture capital funds, but they are rarely the right vehicle for an operating business.
US tax classification of a Pty Ltd
For US federal tax, the Treasury regulations list certain foreign entities as "per se" corporations that must be treated as corporations. The only Australian entry is a public limited company. A Pty Ltd is not on the list, so it is an "eligible entity". By default, a foreign eligible entity whose members all have limited liability is classified as a corporation, but its owners can elect a different classification (for example, a disregarded entity for a single owner) by filing IRS Form 8832, the "check-the-box" election. The right choice depends on the US owner's position, so take advice from a US tax adviser before electing. For Australian tax purposes the Pty Ltd is always a company, taxed at 25% or 30%; see Australian tax rates.
Pty Ltd or branch?
A foreign company can also operate in Australia through a registered branch, without a new company. A Pty Ltd keeps Australian liabilities in Australia and is the structure banks and customers expect; a branch keeps everything in the overseas company. See branch vs subsidiary.
How to set one up
A Pty Ltd can be registered with ASIC in 1 to 3 business days once every director has a director ID. Our company formation service costs From $900 (+ $636 ASIC fees) and includes the constitution, ASIC registration, and ABN and GST registration support.
Frequently asked questions
What does Pty Ltd mean?
Proprietary Limited: a private company limited by shares. "Proprietary" means it is privately owned and cannot offer shares to the public; "Limited" means shareholders' liability is limited to the unpaid amount on their shares.
Is a Pty Ltd the same as an LLC?
Not exactly. Australia has no LLC. A Pty Ltd is the closest equivalent because it gives limited liability and private ownership, but it is a company, taxed as a company in Australia.
Can a foreign company own a Pty Ltd?
Yes. A foreign company can be the sole shareholder. The Pty Ltd still needs at least one director who ordinarily lives in Australia.
How is an Australian Pty Ltd treated for US tax?
A Pty Ltd is not on the US list of per se corporations, so it is an eligible entity. By default it is treated as a corporation, but its owners can elect a different classification on Form 8832. Take US tax advice before electing.
This content is general information only and is not legal, financial or tax advice. Laws and regulations change often. For advice on your circumstances, speak to a qualified adviser.