So, you’re ready to take the plunge and start your own business? Good for you! To be sure you and your business are protected from the start, Rolf Howard from Owen Hodge Lawyers shares nine legal tips all new business owners should know.
Starting your own business puts you in control of your success. However, you need to ensure you are making smart choices so you protect your company as it begins and as it grows.
You also need to protect your personal assets, being careful what property and funds you put at risk as your company gets started.
Nine legal tips for brand new business owners
When you are starting your own business, here are the key tips to keep in mind to get the basics right as your business opens its doors and begins operating for the first time.
1. Carefully consider your business structure
You can operate as a sole trader, a partnership, a trust, or a company. Operating as a sole trader requires the least paperwork initially and on an ongoing basis, but it leaves you most vulnerable to liability and can make it hard for you to sell, transfer and grow your organisation.
Each different business structure has its own pros and cons and you need to carefully consider which structure makes sense for your organisation.
2. Draft contracts to protect your company
A partnership agreement, employment agreements, contracts with suppliers, and shareholder agreements are a few of the different types of legal agreements you may need in order to ensure your rights and responsibilities are clearly established.
The types of contracts you will need are going to vary depending upon the nature of your business, but be sure to have everything in writing outlining the terms of all of your important business relationships.
3. Secure any special licensing or permissions to operate
You may be restricted from operating a business in certain locations by the local planning scheme, or you may be required to get a food handling permit or file a professional registration.
Before you start operations, ensure you have taken all these necessary steps so you won’t face a fine or a shut-down.
4. Protect your brand identity and your intellectual property
You will hopefully begin to build up goodwill and a loyal customer base as your business begins offering its products or services. You want to ensure your company name and trademark are used by your organisation alone.
5. Claim your web presence
Most consumers today turn to the internet first to find companies to do business with. You need to ensure you have a domain name registration filed so that people who search for your brand online will locate your website. You can contact auDA to get your domain name filed.
If someone already owns the domain name you are interested in, it may be possible for you to negotiate for its purchase and transfer.
6. Develop a business plan
Your organisation should have a clear plan in place so you know what your long and short-term goals are.
A business plan not only allows you to establish what your company’s primary focus should be as you begin operations, but you can also present the plan when you are seeking to secure financing.
7. Purchase liability insurance
No matter how careful you are, there is a risk of a lawsuit from a disgruntled employee, injured customer, or consumer who claims you breached an obligation.
Be sure to have appropriate insurance coverage to protect your company’s financial security.
8. Learn the laws for offering products or services
When you are dealing with consumers, there are regulations you must follow under Australian Consumer Law (ACL) and other consumer protection legislation.
ACL establishes a national unfair contract terms law covering standard form contracts used with consumers. It also establishes simple rules for lay-by, product safety regulations, and restrictions on telephone sales and unsolicited selling. ACL has created a robust system of enforcement, including providing many consumer redress provisions.
You need to know the basic requirements of the consumer protection laws so you don’t accidentally violate them and end up owing compensation to consumers.
9. Understand the obligations of employers
When you are hiring any employees, you become responsible for following all guidelines under the Fair Work Act. You must bargain in good faith with employees, keep records; provide pay slips, avoid unfair dismissal, protect employees from safety hazards, and comply with National Employment standards and modern awards.
There are ten minimum entitlements all full and part-time employees are entitled to, including notice of termination, a maximum standard working week, and a right to request flexible work arrangements.
You need to know what you must provide to workers so you are prepared when you hire support staff.
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