So you’re ready to start a new business, you’ve come up with the perfect business name, and you’ve written a great business plan. You’ve figured out your finances and you’re confident that your business is going to be a success. Now it’s time to think about your legal obligations. Every country has different requirements for business owners, so finding the information you need about the legal side of running a small business can be tricky. That’s why we’ve compiled this list of some of the important things you need to consider before you open for business.
There are several different types of business structures in Australia, the most common of which are: Sole trader, Partnership & Company.
Sole Trader: If you register as a sole trader, your business will have no separate legal entity and you alone will be responsible for the liabilities of your business.
Partnership: If you are starting the business with another person (or group of people) you would consider a partnership, under which all partners would share profits according to your partnership agreement.
Company (Pty Ltd): The most common structure for small businesses in Australia is a proprietary limited company. There are more regulatory requirements for a company, but the company will remain a separate legal entity from its owners.
Before you can begin trading you’ll need to register for an Australian Business Number (ABN). The ABN is an 11 digit number that will identify your business. The registration process takes around 15 minutes, is free of charge, and can be completed online at https://abr.gov.au. You’ll need an ABN before you can create accounts with suppliers or issue invoices.
You may have come up with the perfect name for your business, but it won’t be officially yours until you register it with The Australian Securities and Investments Commission. You can register your business name online at http://asic.gov.au. Registering the business for one year costs $34, or you can choose 3 years for $79.
If you would also like to register your business name as a trademark, that is a little more expensive. Trademarks start at $220. More information about trademarks and international property rights in Australia is available from http://www.ipaustralia.gov.au.
Any business that makes less than $50,000 sales each year isn’t required to charge GST, but if you intend to have more than $50,000 in sales over the financial year you will have to register for GST. You can apply for the GST online here https://www.ato.gov.au/business/gst/registering-for-gst/.
Every state across Australia has different requirements for licensing and permits, and they differ across industries. For a comprehensive look at what is required in your state and for your industry visit https://ablis.business.gov.au.
One of the most overlooked aspects of setting up a business is the insurance but it is vitally important. Make sure you get business insurance that covers the basics like fire, natural disasters or theft, but even more importantly make sure your policy includes legal liability so you are covered in case someone sues. Ideally your policy should cover both public liability and product liability.
There are some aspects of a new business that will always be better off in someone else’s hands. A great accountant for example, can help you navigate the complicated tax laws and ensure that you are always in compliance with your tax obligations. Don’t be afraid to outsource to a professional as it can save you valuable time and money in the long run.
Before starting any business, it’s important to know where to go for further advice and support. There are a wide range of resources out there from government and other organisations to help you keep everything on track. Check out www.business.gov.au