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Starting / Business startup

Business legal issues for start-ups

One of the most daunting aspects of starting a new business is unravelling all the business legal issues that could affect you and your new venture.

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You encounter the law in various ways as you go about your affairs every day, and probably think nothing of it. But in the course of business, it pays to be conscious of the way in which you engage with the law, and to make informed decisions.

If you’re unable to identify the best way to proceed yourself, there are some circumstances when you’d be best to seek professional legal advice.

The basics

At the outset of establishing a business of any kind, you’ll almost always need to consider basic business legal issues such as:

  • The requirement for a registered business name;
  • Whether or not an Australian Business Number (ABN) or any other kind of business registration number is required; and
  • Whether or not you need a licence to conduct the business you propose to establish.

Fortunately, you’ll often be spared of the need to hit the law books in relation to these legal issues, because a quick search of Flying Solo or the internet is likely to supply you with the information you need.

"In a business context, failing to appreciate the way in which you engage with the law can potentially have devastating results."

Dealing with more complex business legal issues

Amongst other less obvious, but equally important, legal issues are licensing, leasing, trading terms, privacy and copyrights, just to name a few.

Particularly in a business context, failing to appreciate the way in which you engage with the law can potentially have devastating results.

Want more articles like this? Check out the business startup section.

It could mean, for instance, that you trade using a structure that unnecessarily exposes you, and your family assets, to creditors. It could mean accepting trading terms that you cannot comply with, infringing copy or licence rights belonging to someone else, or contravening privacy laws.

Now, especially in those very early, heady, days of a new venture, all these things can be done easily and innocently enough, but that doesn’t necessarily excuse the decision made, or safeguard you from its consequences.

Ask yourself the right questions

You don’t need to be a legal expert to carry on a business or to safeguard your interests. But, as business owners, it genuinely does pay to be able to identify when something is a legal issue.

Identifying a legal issue is not always easy, but you can go some way to doing it by asking simple questions, such as:

  • Do I have a right or an obligation to do, or not to do, something? For example, “Do I have a right to cancel this order?”
  • If I do this, will I be creating a right or obligation to do, or not to do, something? For example, “If I sign this lease agreement, what obligations will I have?”

If you can identify a legal issue, you’ll be well placed to deal with it in the appropriate way. This might involve taking time to think through the issue and how it affects your rights and obligations, doing some research, or perhaps getting some professional legal advice.

Many small business owners delay investigating business legal issues until there’s no other option. Have you ever wished you’d handled a legal issue sooner, rather than later?

Richard Stewart

is a small business enthusiast with qualifications in law and accounting. As a practising lawyer, Richard provides legal and business advisory services designed specifically to meet the needs of micro and small businesses.

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