Before committing to a business plan, it is essential that you understand the ground you need to cover in terms of obligations and legalities. Here are 6 important legal considerations to make before starting a business:
Choose the Right Structure
Starting your business with the most appropriate structure will give you the best tax outcome, maximise flexibility in terms of introducing new business partners and protect your personal assets from business risks.
Generally, there are four main business structures:
- Sole trader (a business owner trading on their own)
- Partnership (two or more people or entities running a business together)
- Company (a separate legal entity from its shareholders)
- Trust (an entity holding the assets of the business for the benefit of others)
Before you decide on a structure, you need to look closely and your current situation and future business plans. If you’re not sure which structure will be best for your business venture, speak to a legal professional. They will go through the advantages and disadvantages of each structure and assist you to make the right decision.
Consider Your Obligations
Once you have decided on your business structure, you need to consider the legal framework that you are operating in. Are you required to hold any particular licenses or permits? Do you need to provide refunds? Do you need to uphold a certain level of skill, care and diligence? Your obligations in terms of laws and regulations will depend on the nature of your business and your business structure.
Have Thorough Contracts and Documentation
Since most commercial litigation revolves around the interpretation of contracts or weak terms and conditions in business dealings, it’s essential that businesses have a solid contract in place for dealing with customers, suppliers and the purchase of property or sale of assets. Having the right contracts and documentation will prevent future disputes and litigation related to remuneration for services or concluding deals.
Protect Your Intellectual Property
You have a great business idea – make sure that you protect it.
Intellectual property (IP) represents ideas and creations that can be legally owned. Intellectual property is a core asset of any business – it can include things like:
- Your business name
- Your brand
- Your domain
- Products you have created or the innovative ways you produce them
Our intellectual property legal services include all aspects of trademarks, design, copyright, IP Audits and IP searches. Given our firm’s diverse client base and cross-practice approach, we are well placed to advise our clients on intellectual property issues that affect them and their business.
There are certain legal obligations that come with hiring employees. Some of your legal obligations as an employer include:
- Paying your employees correct wages
- Providing employees with pay slips
- Reimbursing your employees for work-related expenses
- Ensuring a safe working environment
- Ensuring you have workers compensation insurance for each employee
- Not acting in a way that may seriously damage an employee’s reputation or cause mental distress or humiliation
- Not acting in a way that damages the trust and confidence necessary for an employment relationship
- Not providing a false or misleading reference
- Forwarding PAYG tax instalments to the Australian Taxation Office (ATO)
- Making appropriate payment under the Superannuation Guarantee legislation. Read the Taxation and your employees page for more information.
To ensure that your business operates lawfully from the outset, you need to conduct thorough research and discuss your employee obligations with a legal expert or business advisor.
Have a Legal Expert on Your Side
Our legal team is here to provide you with legal advice and support whenever you need it. Contact us today to find out how our lawyers can help you to set up your business venture on the right side of the law.