Commercial Law
Small business compliance – what are the legal requirements when establishing a business?
Starting and running a business is more than just cash flow, bookkeeping, and taxes.
There is a plethora of legal requirements you need to be aware of to ensure your business is legally compliant, and to safeguard against the possibility of facing legal issues or penalties because something slipped through the cracks. Below is a brief overview of some of the key legal considerations that you would need to attend to when setting up a new business venture.
- Organise your registrations.
Before you start trading make sure you sort out all relevant business registrations, including the following:
ABN
Every business in Australia needs an ABN (Australian Business Number). Don’t even think about trading without one. This is usually your first step into the world of business, and you can get one before you even have a real business plan in place.
Business name
You have a choice here. If you choose to trade under your own name, you don’t necessarily have to register a business name. However, if you want to trade under a ‘brand name’, you need to register it.
For example, Dave Smith is an electrician who runs his own sole trader business. If he wants to trade under his own name, he doesn’t need to register a business name. If, however, he wants to trade as ‘Dave Smith Electric Services’ then he’ll need to register a business name.
Trademarks
If you want to have exclusive legal rights to your business name, you need to trademark it. Then, after registering your business name, you can go forward and register a trademark to help protect you in the future from intellectual property (IP) infringements.
PAYG
If you’ll be employing any staff, you must register your business for PAYG withholding (pay as you go).
GST
Many businesses will need to register for GST due to their industry or turnover. Others, such as those sole traders turning over less than $75,000 per year, do not have to. (However, lots of businesses still choose to register for GST regardless)
- Learn all you can about Fair Trading and make sure you’re compliant.
Fair Trading is a hefty topic that applies differently to each type of business. Fair Trading covers your legal responsibilities and restrictions on how you trade, including things like pricing, advertising, refunds et cetera.
As a small business owner, your best bet is to visit the Fair-Trading website and look for relevant laws and information that affect you and your business model.
In general, compliance with Fair Trading laws will include regulations around:
- Fair Trading laws.
- Australian Consumer Law.
- The Competition and Consumer Act.
- Australian Standards.
- Codes of Conduct.
- Australia’s trade measurement laws.
- Displaying prices.
- Product labelling.
- Secure card payments.
- Warranties and refunds.
- Adhere to employment laws.
Employing people comes with a fresh set of legal responsibilities.
In Australia, this is handled by the Fair Work Ombudsman, which sets out expectations and requirements for all employers. It’s incumbent on you to consult their website or business/legal professionals to make sure you comply with Australia’s employment laws.
Some of the most prominent areas of employment law that you’ll need to consider are.
- You need to pay your staff correctly.
- Comply with Single Touch Payroll.
- Ensure adequate leave and entitlements.
- Create fair contracts.
- Provide adequate employment conditions.
- Handle workplace problems and bullying appropriately.
- Know the difference between an employee and contractor.
- Understand unfair versus fair dismissal.
- Consider intellectual property.
You may need to protect your intellectual property when trading. Once you’ve learnt about intellectual property and whether your intended target is already protected, you can apply yourself or consult an advisor.
- Know the rules for marketing and advertising.
There are rules around how you market and advertise. It’s not a free-for-all and you can’t say whatever you please or contact people in ways that are not allowed.
There are rules that need to be followed around:
- Signage and wording.
- Advertising.
- Licensing or rights to imagery, and music.
- Pricing.
- Licensing or rights to imagery and music.
Also, while not strictly necessary and certainly not a legal matter, it’s also good idea to register a domain name for your business while you’re doing your registrations, even if you don’t have a website ready.
A range of other legal obligations for business owners exist in Australia that protect yourself, consumers, and employees. We recommend you conduct thorough research or consult with a legal expert to make sure you understand your rights and restrictions.
For more information and expert advice, ask to speak to a lawyer at Ezra Legal on (08) 8231 6100 or email reception@ezralegal.com.au
For information on the range of commercial legal services that we provide at Ezra Legal, head to:
Julian Roffe
Practice Manager
Ezra Legal
