When setting up a small business, there are a number of legal essentials that you will need to consider and set up before trading.
These provide you with a firm foundation from the outset and can assist you in avoiding costly disputes down the track.
Although creating this legal framework can seem tedious and expensive, it’s a necessary investment into your business, particularly if you intend to grow and expand.
We have set out below a quick checklist to ensure your business starts off on the right foot.
1. Choose a business structure
The most popular options are a sole trader, partnership, company or multiple companies (i.e. holding company and operating company) and a trust with a corporate trustee.
It’s critical that you first obtain legal and financial advice to assist you with determining your chosen structure best suits your current and future business goals.
2. Form your business structure
Once you have decided on the most appropriate structure for your business, you will need to register with the Australian Business Register (ABR) (for sole traders and partnerships) or ASIC.
You can also register your business name, obtain an Australian Business Number (ABN), register for Goods and Services Tax (GST), Pay as you Go withholding tax (PAYG) and a Tax File Number (TFN).
3. Obtain the necessary insurances
Insurance is essential for your peace of mind and to provide your business with financial reassurance in the event something goes wrong.
Recommended business insurances include:
– Public liability insurance
– Professional indemnity insurance
– Product liability insurance
– Workers compensation insurance
– Assets and revenue insurance
– Motor vehicle insurance
– Fire and perils insurance
– Income protection insurance
– Death and total and permanent disability insurance
4. Obtain the necessary licences/permits to operate your business
It is important that you research the laws surrounding your chosen industry and understand the necessary licences/permits required to operate your business. Without these licences or permits in place from the start, you may be setting yourself up to fail with potential liability for costly fines and risk exposure.
5. Protect your intellectual property
Your intellectual property is an asset to your business and you can protect this through copyright and trademarks. You should also register your domain names and social media names before you commencing trade.
6. Protect your website and social media
7. Have Your Key Legal Agreements In Place
There are a number of legal agreements which you may require when setting up your business so as to ensure it has the best possible start. These agreements include:
– Partnership Agreement
– Shareholders Agreement
– Confidentiality Agreement
– IP Assignment Agreement
– IP Licence Agreement
– Client Agreement/Business Terms and Conditions
– Manufacturing Agreement
– Distribution Agreement
– Franchise Agreement
– Employment Agreement
– Contractor Agreement
– Service Agreement
– Staff Handbook Policy.
As you can see, there are a number of legal essentials you will need to consider when setting up your small business. While it may look like a lot of work, with the assistance of a trusted legal team and accountant, you can help ensure you business has a solid grounding from the start so that you can spend your time focusing on achieving your business goals!
Written by Ursula Hogben via The Entourage