It’s no secret that starting a new business is both extremely exciting and challenging. You feel a mixture of pride and apprehensiveness, because you want your endeavor to be successful, you’ve invested a lot of time and money into it and you’re uncertain whether you’ll make it. When you add the fact that a great majority of new companies never actually take off to the mixture, it’s clear why everyone who is about to start a business is under a lot of stress.
Needless to say, there are so many things you have to do or choose before you start working and earning money. Some of those tasks are creative, exciting and inspiring, like choosing a name and logo. Others, on the other hand, are tedious, but necessary, such as taking care of legal obligations. The thing is that each country has different requirements for business owners wishing to start a company, but we’re going to focus on Australia here. So, if you’re considering starting a business down under, take a look at the following list of legal requirements before you do anything else.
Selecting a business structure
It is very important that you make the right choice when it comes to choosing the business structure for your business. Namely, there are several types of business structures in Australia, but the most common ones are sole trader, partnership and company. If you register as a sole trader, your company will have no separate legal entity and you’ll be the only persons responsible for the liabilities of your business. Partnership, on the other hand, means you’re starting the business with another person(s), where all partners would share profits according to your partnership agreement. Finally, the most common structure for small businesses in Australia is a proprietary limited company, which is a separate legal entity from its owners, but it has more regulatory requirements. If you’re not sure what the best structure for your business is, you must consult experts, whose legal advice will help you choose the best option for you, since you’ll have all the information you need to make an informed decision.
Registering your business name
Once you’ve decided what type of business you’re going to run, you can finally register your company, but you also need to come up with the name for it. You need to register your name with the Australian Securities and Investment Commission before you start using for other purposes. This too can be completed online, but it’s not free of charge. Registering the business for one year costs $34, or you can choose a 3-year plan for $79.
Registering for an ABN
Australia issues an Australian Business Number (ABN) to all new businesses. This is an 11-digit number, which identifies your business. The registration process is quick, smooth and free of charge and you can complete it online in under 15 minutes. You’re going to need to register the address, as well. If you still don’t have a purchase or rental agreement, you need to consult experts, such as this conveyancer from Essendon, who can help you sort out all property-related legal issues.
Trademarks
You also have an option to register your business name as a trademark. It does mean you should spend a bit more money, but it could be a smart thing to do early on. Luckily, we’re not talking about an exorbitant amount, since trademarks start at $220. Consult Ipaustralia.gov.au for more information about trademarks and international property rights in Australia and how you can benefit from registering your business name as a trademark.
Registering for GST
You might also need to register for GST if you intend to have more than $50,000 in sales over the financial year. Again, this is a simple procedure, and you can apply for the GST online at https://www.ato.gov.au/business/gst/registering-for-gst/. Most business don’t expect to achieve record-breaking number in their first year, but if the nature of your business is such that this applies to you, make sure you don’t forget to register for GST.
Licenses & permits
Australia is a big country, so it’s logical that every state across it has different requirements for licensing and permits, and there are also differences across industries.
Insurance
What many business owners overlook when starting a business is the issue related to insurance. You need to get business insurance that covers the basics, such as fire, act of God or theft, but you should also consider an insurance policy which includes legal liability, so that you’re covered in case someone sues your company. In the world where lawsuits are more popular than ever, this can turn out to be quite useful. Ideally, your policy should also cover both public liability and product liability.
These are just some of the legal requirements you have to know about if you’re starting a company in Australia. By adhering to all relevant provisions, you’ll be able to focus on helping your business grow, which is the reason you’re starting your own company after all.
