You didn’t start your business to become a lawyer. Yet there are so many legalities that go hand in hand with running your business daily. Dealing with the legal side of small business affairs isn’t exactly the most exciting part of being an entrepreneur. But here’s the thing: getting it right from the start saves you time, stress, and money.

Legal compliance might sound intimidating, but it’s manageable and far less overwhelming when you break it down into bite-sized steps.

We’ll take you through the legal essentials of running your business, from choosing the proper structure to protecting your IP and keeping your contracts watertight. You’ll also find helpful tools, links, and resources to make the legal side of things less of a headache.

Let’s get started.

Choosing the right business structure

Your business structure is the foundation of your operation, impacting everything from your tax obligations to your personal liability and even how you can grow.

There are a few options to consider:

• Sole trader: This is the simplest structure. You’re in complete control, but you’re also personally liable for any debts. It’s a popular choice for freelancers and micro business owners.
• Partnership: A partnership is great when two or more people are working together. Just remember, everyone in the partnership shares liability.
• Company: Setting up a company gives your business its own legal entity. It protects your personal assets but requires more administration and compliance.
• Trust: A trust is a bit more complex and is usually used for asset protection or family businesses. It’s worth speaking to a lawyer or financial advisor for this one.

Resource:

• Use this Business Structure Comparison Guide to determine which structure suits you best.

Registering your business

Once you’ve decided on your structure, it’s time to tick off those official boxes:

1. Choose a business name: Pick something memorable that reflects your brand. Before you settle, check if it’s available using the ASIC Business Name Register.
2. Get an ABN: An Australian Business Number (ABN) is essential for tax purposes, invoicing, and credibility. Register your ABN for free at ABR.gov.au.
3. Register for GST: If your business turns over $75,000 or more annually, you’ll need to register for Goods and Services Tax (GST).
4. Secure domain names: If you’re taking your business online, grab your domain name early. Sites like GoDaddy or Crazy Domains can help you secure it.

Tool:

• Business Setup Checklist
  Stay organised with our downloadable checklist of all the steps you need to get legally set up.

Understanding licences and permits

Depending on your industry, there might be specific licences, permits, or regulations you need to follow. For example:

• Food businesses require safety certifications and council permits.
• Tradespeople need relevant industry licences.
• Retailers may need licences for certain products like alcohol or tobacco.

It’s essential to do your homework here. Failing to get the right licences can lead to fines or even business closure.

Resource:

Use the Australian Business Licence and Information Service (ABLIS) to find out what licences and permits your business needs.

Contracts: Keeping it watertight

Contracts might sound boring, but they’re critical to running a successful business. They protect your interests, clarify expectations, and give you something to rely on if things go wrong.

Key contracts to consider include:

• Client Contracts: Outline your services, deliverables, payment terms, and deadlines.
• Supplier Agreements: Setting clear terms in writing can help you to avoid disputes with suppliers.
• Employment Contracts: If you’re hiring staff, make sure your employment contracts cover what their role is, their responsibilities, and any expectations or KPIs.
• Partnership Agreements: If you’re in a partnership, this document clarifies who does what, who owns what, and how profits are shared.

When creating contracts, it’s worth investing in professional advice or templates.

Resource:

Check out these free contract templates available through Lawpath or Fair Work Australia.

Protecting your Intellectual Property (IP)

Your business’s brand, content, and creations are valuable assets. Protecting them ensures no one else can copy or use them without permission.

Here’s what you need to know:

• Trade marks: A trade mark protects your business name, logo, or tagline. You can register your trademark via IP Australia.
• Copyright: Automatically applies to original works like books, music, or websites, but you should still outline ownership clearly.
• Patents: If you’ve created a new product or invention, then you should think about applying for a patent to protect it.
• Trade secrets: Keep processes or recipes under wraps with confidentiality agreements.

Resource:

• IP Checklist
  Use this handy checklist to ensure you’re covering all the bases when it comes to protecting your ideas.

Staying compliant with employment law

If you have employees (or plan to), understanding employment laws is non-negotiable.

A few essentials include:

• Fair pay: You must pay at least the minimum wage based on your industry award. You can check pay rates at Fair Work Australia.
• Workplace safety: Follow Work Health and Safety (WHS) requirements to create a safe working environment.
• Employee rights: Employees are entitled to breaks, leave, and a fair working environment. Understand your obligations.
• Superannuation: Don’t forget to pay super! Use the ATO Super Guarantee Guide to understand your responsibilities.

What you need to know about tax

Taxes don’t have to be stressful. With the right systems in place, you can manage your tax obligations without last-minute panic:

• Keep records: Maintain clear and organised records of income, expenses, and receipts.
• BAS and GST: If you’re registered for GST, you must lodge your Business Activity Statement (BAS) quarterly.
• Deductions: Know what you can claim as a business deduction – from office equipment to work-related travel expenses.
• Hire a pro: A good accountant or bookkeeper can save you time and help you maximise deductions.

Resource:

Visit the ATO Small Business Hub for essential tax tools and advice.

When to seek professional advice

Sometimes, Google just won’t cut it, and you need expert advice. Don’t hesitate to call in the pros when you’re:

• Choosing a complex structure like a trust.
• Drafting major contracts or partnership agreements.
• Dealing with a legal dispute or intellectual property issues.
• Unsure about compliance in your industry.

If you want to avoid costly mistakes, then seeking legal advice can keep your business running smoothly.

There is nothing glamourous about contracts and compliance, but getting your legals right is essential to building a strong, sustainable business. Ensure strong legal foundations right from the get-go, and you’ll set your business up for success and avoid unexpected bumps in the road.

Don’t forget to bookmark this page to use the handy checklists, templates, and resources to take the stress out of the legal process for your business.