What are the legal requirements for starting a business in Australia?
In every country, there are business laws and regulations in place to protect both the businesses and the people associated with. Being compliant with these laws will ensure the smooth running of your business and keep it legal. In this post, we share common legal requirements for starting a business in Australia.
Complete These Basic Legal Requirements Before Starting a Business in Australia
1. Register Your Business in Australia
Business registration is the first of the basic legal requirements for starting a business in Australia. Everyone who wants to start a business must register their business with the proper authorities and get an Australian Business Number (ABN).
Additionally, they have to register for all the taxes that are applicable to their particular industry. These might require you to register for Goods and Services Tax (GST), Tax File Number (TFN), and Pay-as-You-Go (PAYG) withholding.
The registration website of the Australian government will give you more information about the taxes, licenses permits, intellectual property ad other business regulations. You can also register a business name if you want to operate under a particular name, and if you want a unique business name that nobody else can use, you need to apply for a trademark.
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2. Follow Fair Trading Laws
For your business to be legal, it has to follow government regulations for businesses in Australia, particularly fair trading laws. These laws are in place to make sure that you adhere to fair trading practices, maintain competitiveness and keep the customer informed. As a part of the fair trading practice, you need to know about the Australian consumer law in context to your business, comply with the competition and consumer act, Australian standards, and codes of practice.
You will also have to understand the nitty-gritty of selling goods and services. For this, you need to know about Australian trade measurement laws, pricing regulations, laws related to displaying prices, product labelling, rules concerning warranties and refunds and selling goods and services.
3. Enforce Contracts
The next on the list of basic legal requirements for starting a business in Australia is contracts. As a business owner, you have to understand contracts, their terms and stipulations, before signing them. And you will be signing a lot of them when running a business.
When you agree to make a product or render service in lieu of money or any other benefit, it is a legal commercial contract and contracts are legally enforceable by the law. Failing to meet the terms of the contract are grounds enough for legal action against your company, so make sure that you’ve read and that you adhere to all clauses.
4. Adhere to Privacy Law
Privacy law regulates how the personal information of customers should be handled. Most businesses collect and store their customer’s personal information, but keep in mind that there are strict guidelines to make sure that such information does not fall into the hands of others.
You have to take every precaution to protect your customer’s personal data. If you need help with data security and data privacy, talk to us.
5. Follow Importing and Exporting Rules
You can’t just decide to import or export products. One of the main legal requirements for starting a business in Australia is that no importing or exporting can be done without advice and information from the Department of Home Affairs.
6. Do Not Infringe Intellectual Property
Any intangible property which is a result of creativity like patents and copyrights is intellectual property. One of the legal requirements for starting a business in Australia is that you have to register your intellectual property in Australia.
Additionally, any goods that you export should not infringe the intellectual property of any other business. Understanding intellectual property laws is the best way to save yourself from legal and financial penalties and actions. Do a comprehensive search to be sure that it isn’t already registered.
7. Abide by the Laws for Employing People
When you employ somebody, you are responsible for them while they are at work within premises or if they are doing work outside the office. You bear many legal obligations towards them like paying fair wages, reimbursing them for any expenses related to work, following the guidelines laid down by the work health and safety regulations and codes of practice, and having adequate worker’s compensation insurance.
In a nutshell, you need to abide by the laws for employing people, and you must understand these legal requirements before starting a business and employing staff.
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8. Understand the National Anti-Bullying Laws
When thinking about the things you need to start a business legally, don’t forget about the legal risks associated with bullying and harassment of an employee or a group of them at the workplace. Bullying tends to put the worker’s health and safety at risk and should never be taken lightly.
If you want to limit your potential liability, take the necessary steps and minimise occurrences of bullying or harassment.
9. Be Mindful of Environmental Protection Laws
Today, governments are taking strict steps to ensure that all businesses are mindful of their obligations towards the environment. Robust environmental licences and permits are now included in the basic legal requirements for starting a business to make companies responsible for their environmental duties. These environmental protection laws are jointly administered by the federal and local governments.
Each and every business can play a role in managing the environment. However, the laws of the environment that are applicable to your business depends solely on your business type.
10. Know Your Legal Marketing Obligations
Marketing is an essential part of running a business. This is how you create brand awareness and reach out to the public. Quite often, companies use cunning marketing gimmicks to mislead consumers or customers. Sometimes they even use it to misrepresent the product or the service.
No matter which ends you look at it, the customer is the one who bears the brunt of this malpractice. When marketing your products or services, you need to work within the regulations that govern them. Marketing laws mostly pertain to advertising, spamming, pricing, signage, etc.
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Legal Requirements for Starting a Business Based on Your Business Structure
There are different business structures in Australia, and the most common are sole trader, partnership and company.
Sole Trader
If you are starting a business in Australia as a sole trader, your business will have no separate legal entity. That means only you will be responsible for the liabilities related to your business.
Partnership
If you want to register a business in Australia with another person or a group of people, you would consider a partnership. In this type of business, partners will have a partnership agreement and it will determine the profits of each partner.
Company (Pty Ltd)
A proprietary limited company is the most common business structure in Australia. There are more regulatory requirements for a company, but the company will remain a separate legal entity from its owners.
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Other Legal Requirements for Starting a Business in Australia
Starting a business is not easy. There are many things that you need to take care of before you can really start a company and keep it running. The legal aspect of starting a business in Australia is one of the most important.
There is so much you need to know in terms of legalities that you might find yourself confused and frustrated. The golden rule is to be on the side of caution. Make sure you’ve met all of the legal requirements for starting a business in Australia.
Before it becomes overwhelming, seek help from highly skilled practitioners and use good legal advisory services in your territory. Check out BGC Consultants or the tool called the Australian Business Licence and Information Service (ABLIS), which helps you identify all licenses and permits required for your line of business.
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