You have a brilliant idea about a small business that you would like to start. You have developed a business strategy and you have lined up key stakeholders. You have put a lot of work into preparing your small business for launch and you are almost ready to go.
Now you just need to get the legal side of things sorted out.
In this article, we provide a checklist of things that you should consider as you start your small business.
1. Small Business Structure
First, you should decide on a business structure through which to operate the business. If you have not decided on your business structure, we recommend that you read our previous article, ‘Choosing a Business Structure’, which explains your options.
2. Agreements between Owners
If you are going into business with someone else, you should consider:
a) A shareholders’ agreement, if your business is operating through a company;
b) A partnership agreement, if your business is operating as a partnership; or
c) A unit holders’ agreement, if your business is operating through a unit trust.
3. Business name, ABN and GST registration
You will need to register a business name, Australian Business Number (ABN) and register for GST. You can register for each of these at the Commonwealth Government’s Business Registration Service website.
4. Domain name registration
Once you have an ABN, you will be able to register an Australian .com.au domain name.
You may also want to register other domain names, such as a .com domain name.
5. Employees and Employment agreements
You will need to check whether your employees are covered by a Modern Award, and ensure that you are complying with your obligations under the Fair Work Act 2009 (Cth), any relevant Modern Award, and applicable state legislation.
We recommend preparing written employment agreements for use with your employees. A written employment agreement will document the terms on which you engage your employees, and protect your interests as the employer.
6. Independent Contractor agreements
If you plan to engage independent contractors, then we recommend that you:
a) Obtain legal advice to ascertain that your contractors are in fact contractors and not employees. There are potentially serious consequences for wrongly classifying workers as contractors, when they are in fact employees.
b) Establish a written contractor agreement with each of your contractors.
You will need to pay superannuation to your employees. Generally, you also need to pay superannuation to your independent contractors. If you are an employee of your own company, you will need to pay yourself superannuation on any wage you draw from your company.
8. WorkCover insurance
You will need to have WorkCover insurance for your employees and often also for your independent contractors. If you are an employee of your own company, you will need to have WorkCover insurance to cover yourself.
9. Terms of Trade
Often, it is advisable for a business to establish terms of trade for use with its customers. Terms and conditions of trade would include matters such as:
• Payment terms
• Security for payment of liability and limitations.
10. Public liability, product liability and directors/officeholders insurance
You should obtain appropriate insurance to protect you and your business. Insurance products you should consider include public liability, product liability and management insurance.
How can Sharrock Pitman Legal assist in starting your small business?
At Sharrock Pitman Legal, we are Commercial Law Specialists, accredited as such by the Law Institute of Victoria, and have extensive experience helping new businesses get up and running. If you would like any advice or assistance starting your new business, please do not hesitate to contact Mitchell Zadow on 1300 205 506 or alternatively fill in the form below.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
Liability limited by a scheme approved under Professional Standards Legislation.
For further information contact
Mitchell is the Managing Principal of our law practice.
He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.