Whether you’re looking to make it as a financial advisor in Melbourne, a lawyer in Sydney, or starting an insurance company in Brisbane, there are certain legal conditions you are required to meet. Australian law has strict requirements for new business owners. Let’s take a look at what you need to address when preparing to launch your own company.
Your business structure
Each Australian business is either a sole trader venture, partnership, or company. You have to state which of these business structures your business falls into. Each has different financial obligations, liabilities, risks, and benefits.
Sole traders operate their businesses as individuals. They are personally responsible for any debts or liabilities. This structure is easy to set up, but highly risky. It’s also unsuitable for going into business with even one other person.
Partnerships are businesses operated by two or more people who share profits. They require a formal partnership agreement. All partners are responsible, both jointly and individually, for the business’ liabilities and debts.
Companies can be run by individuals or groups. Either way, they’re separate entities from their shareholders. The Australian boutique law firm Stephen Wawn & Associates is an excellent example. Although it’s clearly a group of solicitors, the company website identifies the business as distinct from the people.
Companies are liable for their own debts. This structure is popular with startups because it reduces personal liability. It also makes the business better suited to attracting investors.
Every business structure requires an Australian Business Number. This is the unique identifier that verifies the legitimacy of your business. It confirms your identity and validity in the eyes of the general public, other businesses, and various government departments.
For your ABN to be valid, you must either:
- be a registered Australian company,
- be providing goods or services to customers, or
- be about to start providing goods or services to customers.
Your taxation requirements will vary depending on your business structure. Sole traders use their personal Tax File Numbers and must lodge their tax returns each year. Partnerships and companies must apply for a TFN for the business itself and file their own tax returns.
Keep in mind that a business earning more than a set threshold must also apply for a Goods and Services Tax. It might be a good idea to hire an accountant to help you navigate the relevant taxation legislation.
Any given business must take steps to protect its equipment, as well as any incidental belongings. This encompasses everything from heavy machinery, through your transportation fleet, down to computers and office printers.
If you need it to run your operations, insure it. Consult with a few business insurance brokers to find the best option for your needs. Consult the coverage you need and the costs in the long term.
Some industries also require specific liability insurance. Public Liability Insurance is always a good idea if your business directly interacts with customers. You should also insure against workplace injuries. Each state has specific insurance schemes, so take some time to familiarise yourself with the requirements that apply to you.
A schematic representation of the digital branding process
The name under which you register your business must be unique and not already in use by another business. You can check a name’s availability by simply googling it, as well as by searching the Australian Trade Marks Register and the website of the Australia Securities and Investment Commission.
Once you confirm that the name is indeed available, register it with the ASIC. This will put you on record with the ASIC itself as well as the public Business Name Register. However, it doesn’t grant you intellectual property rights to the name.
Your business name and logo combined comprise your brand, which you should take steps to protect as your unique intellectual property. Apply for trademark registration of these elements. The registrations are managed by IP Australia, which is a government agency.
A trademark registry gives you leverage to enforce your rights against misuse of your company name or logo. This lets you control how your business is portrayed by employees, customers, suppliers, and distributors.
Some businesses require a license for providing their goods and services. This typically applies to health providers, food services, and the trades. Your state industry bodies, fair trading authorities, or building commissions can inform you of whether you need one and what kind.
Businesses operating out of a mobile site or fixed premises might also need council approvals or permits. Check with your local council what their guidelines and your obligations are.
In addition, check your state’s legislature regarding contracts – i.e. client agreements, employment agreements, modern awards, terms, and conditions, etc. Australian law is particularly stringent regarding hiring contractors. Consult the Fair Work Ombudsman and Australian Taxation Office websites to make sure everyone’s status is clear and all employee and contractor rights and duties are duly defined as appropriate for your business structure in your state.