Based on UK common law, Australia’s legal system enjoys an excellent international reputation. Australia’s political and legal system is positively ranked as the world’s 8th least corrupt in Transparency International's 2009 Corruption Perceptions Index. Consequently, individuals and organisations forming a company in Australia can be confident of fair treatment in legal and regulatory matters.

This is reinforced by Australia’s transparent legal system and constitution, which strongly supports rule of law and the protection of intellectual property rights. Australia is bound by the terms of the World Trade Organisation’s (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. TRIPS sets standards for and helps enforce intellectual property rights (IPR) protection. Intellectual property rights encourage further innovation and creativity and promote investment in research and development. This is a source of comfort for entrepreneurs forming a company in Australia in the hi-tech sector.

The main legislation through which Australian corporate law is enforced is the Australia Corporations Act 2001. The Australian Securities & Investments Commission (ASIC) is the regulatory body to enforce the law related to forming a company in Australia, and governs companies, businesses and certified public accountants.

Australia is positively ranked as the world’s 3rd-freest economy in the 2010 Index of Economic Freedom by The Heritage Foundation. The index ranks a country for its financial freedom, protection of property rights, labour freedom, business licensing requirements and freedom from corrupt practices.

Furthermore, Australia boasts excellent corporate governance standards. As evidence of this, Australian corporate boards are ranked 2nd most effective in the world for supervising company management. Australia is also ranked positively as the world's best for managing shareholder value, and for the implementation of ethical practices in companies.

After forming a company in Australia, it is necessary to prepare annual financial statements complying with Australian Financial Accounting Standards. The financial statements accompany an annual corporate tax return submitted to the Australian Taxation Office (ATO) by 30 June each year. Because Australian accounting and tax laws are complex, most business people engage the professional services of qualified accountants and tax advisors.

After forming a company in Australia, an Australia-resident company suffers corporation tax of 30% on global income. Expenses deductable include the rent of business premises, hire or lease of plant or equipment, business travel and motor vehicle expenses. Dividends paid from an Australia company are subject to further income tax in the hands of the recipient.