Starting a business can be an exciting time, full of potential and purpose. However, navigating the logistics of setting up a business can be daunting for first-time entrepreneurs. It may seem like a boring (and often costly) task but taking the time to set your business up properly will help minimise your risk and save headaches later on! Here are 10 basic tips to get you started.
- Business name availability
A business name, otherwise known as a trading name, is a name under which an individual or other legal entity conducts business. Before you invest too much time and money in your branding, you need to make sure that your proposed business name is legally available for use; i.e. that it’s not being used by someone else.
To do this, you can run a free business name check at ASIC.
Also, be aware that registering a business name does not give you an automatic trademark over the name. If the business needs to have exclusive rights on the business name, you will need to have the name trademarked. To avoid infringement rights issues, check if the name is already trademarked on the Australian Trademark Search.
By checking the business name availability upfront, you’ll have peace of mind knowing that you won’t be ordered to abandon your business name in the future because of a trademark dispute.
- Domain name and social media handles
If you plan on having a website and/or social media accounts for your business, then I recommend checking the availability of your desired domain and social media handles at the same time you check business name availability (which will usually be the same or similar to your business name). For this purpose, you can use https://namechk.com/ which checks domain name availability (for websites) and availability across a range of social media platforms.
- Business registrations
As well as registering a business name, there are a variety of taxes that your business may need to register for. These may include:
- an Australian Business Number (ABN)
- the Goods and Services Tax (GST)
- a tax file number (TFN), and
- pay as you go (PAYG) withholding (if you are hiring employees).
There are lots of helpful tips regarding necessary registrations on this Government Business site.
- Pick a legal structure
When starting a business, you’ll need to determine which business structure suits your business venture and its current and future goals. To do this, you will need to consider the advantages and disadvantages of each different business structure and work out which one best suits your needs.
The four most common types of business structures in Australia are:
- Sole trader: an individual operating as the sole person legally responsible for all aspects of the business. As a sole trader you can still employ people to help you run your business.
- Company: a legal entity separate from its shareholders. There are a number of differences between sole traders and companies when it comes to tax differences, potential personal liability and legal obligations when employing people.
- Partnership: an association of people or entities running a business together but not as a company.
- Trust: an entity that holds property or income for the benefit of others.
If you’re unsure which structure suits you best, you can use the government’s free tool Help Me Decide. You answer a few questions and they will advise which business structure sounds most suitable for you. Unless you are choosing a fairly simple structure (like sole trader), I recommend seeking advice from a lawyer or an accountant.
- Local permits/licences
Licences and permits either give a business approval to do an activity or help protect a business and its employees. Which licences and permits you need will(if any) will depend on the type of business you want to set up and your activities.
To get started, The Australian Business and Licence Information Service (ABLIS) website has a list of all licences, permits, and registrations necessary to commence business operations.
Also, the Government’s Business website has Industry Factsheets available for further guidance.
As always, if you are unsure, seek advice from a lawyer to cover all licensing requirements specific to the business to avoid fines and legal difficulties.
- Personal information
As a business, you will undoubtedly collect ‘personal information’ from your customers. Personal information is any piece of information that relates to a living, identifiable human being. It includes people’s names, contact details, medical and health records, purchases records or anything that you can look at and say, “this is about an identifiable person”.
There are privacy laws around the collection, storage and use of your customer’s personal information. As a business owner, you are responsible for protecting your customers’ personal information from theft, misuse, interference, loss, unauthorised access, modification and disclosure.
The OAIC website provides information on privacy for start-up businesses.
- Website documents
If you are setting up a website for your business, it’s important to consider the legal documents you will need. For example, most businesses will need:
It’s best to get these documents drafted or reviewed by a lawyer. While there are some decent templates available on the internet to help get you started, depending on what industry you are in and what laws apply to you, your legal requirements may vary and therefore it’s smart to make sure your legal documents are sufficiently personalised to meet your individual business needs.
- Employee laws
There are many legal obligations for employing people. They include:
- paying your employees correct wages
- ensuring you have workers’ compensation insurance for each employee
- reimbursing your employees for work-related expenses
- abiding by work health and safety regulations and codes of practice
- ensuring you have a Working With Children check if you work or volunteer in child-related work.
To read more about employment laws, industrial awards and contracts – check the Government Business website. While you’re there, also check out the distinction between employees and independent contractors as the legal obligations vary depending in which capacity you engage your workers: Employees vs Contractors.
- Fair trading laws
As a new business owner, you need to be aware that there are a number of federal and state laws to protect you, your business and your customers from unfair trading practices. These laws, along with industry Codes of Practice, help your business operate competitively and fairly, and make sure your customers are protected and informed.
Read more about your fair trading obligations here.
- Legal obligations of marketing
When marketing /advertising your products or services to your clients, you need to be mindful of the relevant regulations, to ensure you aren’t misleading or deceiving your customers. For example, there are laws on advertising, signage, running competitions, spam, pricing and licencing for using music in your advertising.
Find out more here.
Some other resources that might be helpful when getting started with your new business:
- gov.au: Starting a Business Guide
- ASIC: https://asic.gov.au/
- ABN Lookup
If you require further help, there are many independent business lawyers who offer consulting services for reasonable fixed fees. Or there are even some free or low-cost services available here.
Chantel is a business lawyer based in Perth, Western Australia. She consults with client’s around Australia and is renowned for her ability to ‘demystify’ the complex world of business law for her clients, and to draft documents in Plain English. She enjoys the challenge and flexibility of working with different clients and industries and prides herself on her ability to provide excellent legal services to small to medium businesses at an affordable rate. www.themislegal.com.au