New businesses in Australia face strict regulations regarding contracts, finances, fair work standards, etc. You should always take the time to do your own research, but here are five essential items to get you started.
The structure of the business
The three most common structures for business entities in Australia are sole trader ventures, partnerships, and companies. When you are starting your own project, you have to decide on a structure and register as such. Each of them features different benefits, risks, and liabilities.
Sole trader ventures are owned and operated by individuals. If you register as a sole trader, you bear personal responsibility for any debt or other liability your venture faces. The good side of this business structure is that it’s quite easy to set up and register, but the downside is the high personal risk. Also, if at some point you should wish to bring even one other person into the business, this structure forbids it.
Partnerships are owned and operated by two or more people. This structure requires that a formal partnership agreement be drawn up and signed by all parties. All of the partners share in the profit and all of them are responsible for liabilities and debts. The trick with partnership-type businesses is that the responsibility is both individual and joint.
Companies can be owned and operated by either an individual or a group. It’s the most popular business structure for those who wish to launch a startup because it offers the benefits of partnerships while significantly reducing the entrepereneiurs’ personal liability. If your business is such that you wish to attract investors, the company format is the best suited of the three to that purpose.
Beyond these, you may consider other types of business structures, such as trusts, co-operatives,joint ventures, or indigenous corporations. You also have the option of changing your business’ structure down the line.
The relevant licences
Depending on the industry in which you are launching your venture, you may need to acquire certain licences first. Do some research about what you need to be able to conduct business legally. For example, electricians and similar household maintenance workers can be licensed at different levels which determine the scope at which they can provide their service.
Licence information should be available with your relevant industry bodies, fair trading authorities and the like. You may also need a council permit. Your best strategy is to consult with a local legal expert who can explain all the nuances. For instance, if you operate in Melbourne lookup reputable Sunbury lawyers and ask for a consultation.
The Australian Business Number
Whichever business structure you decide on, you will need an Australian Business Number (commonly known as ABN) for your venture. The purpose of your ABN is to serve as your unique identifier and thus confirm that your business is legitimate.
A valid ABN is like the ID card that your business presents to government departments, other businesses, and the general public. In order to get a valid ABN, you must meet one of the following conditions:
- Providing goods and/ or services,
- Preparing to start providing goods and/ or services, or
- Already a registered Australian company.
Tax and insurance
Each business structure must meet different tax requirements. Sole traders register with their own Tax File Number (TFN), while partnerships, companies, and other group ventures require a TFN for the business as its own entity. You may also be obliged to register for the Goods and Services Tax.
In addition to taxation, take steps regarding your insurance. Protect your office equipment, production machinery, transportation, etc. Anything that’s necessary for your operations deserves a place in your insurance policy. Consult with several brokers to see whose offers and rates best suit your needs.
Check whether your industry requires specific liability insurance as well. These requirements tend to be state-specific. If you directly interact with end-customers you may need public liability insurance. Workplace injury insurance is another possible requirement. Take the time to thoroughly research what applies to you.
The business name and trademark
You must register your business under a name that’s fairly unique and not already being used by some other venture. You can check with the Australia Securities and Investment Commission and the Australian Trade Marks Register to see if your intended business name is available. If so, register your venture to be on record with the ASIC and the public Business Name Register.
Be aware that this registration doesn’t make the business name your intellectual property. If you want those rights, you must register a trademark with the relevant government agency, IP Australia. A trademark comprises a business name combined with a logo, which becomes your brand.
Trademarking your brand gives you a measure of control over how employees, partners, and customers portray your business. If your name or logo are misused, the trademark registry serves as legal leverage in enforcing your intellectual property rights.
The legal side of starting a new business in Australia might seem a little daunting. Divide your research and administration into these baseline categories to make it more manageable. In addition, you might want to explore the Fair Work Ombudsman website. Business owners’ positions somewhat vary by state. Make sure you’re clear on your obligations and rights in both the technical and human resources aspects.
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