Firstly, congratulations on opening your own business! For the purposes of this article, we will assume that you are opening and setting up your own bakery, and not simply purchasing a bakery from an existing business owner.

There are many legal considerations when opening your own business and some very specific considerations when you are opening a bakery. Of course, it is always advisable to speak with a business lawyer.

What business structure are you using?

You need to consider how you will set up your business. There are pros and cons for different business structures, and it is up to you to decide which works best for you. For more information about business structures, go to:

Are you baking the goods or getting them from a third party?

Are you planning on getting up each morning and baking your cakes and pastries? Or are you planning on having some delivered from a third party?

There are different considerations for each.

If you are baking your own goodies, you need to think about if it is logistically possible to consistently do this and how you will keep your goods fresh.

If you are having them delivered, you need to ensure that their goods are fresh and safe to consume. In this instance, we would strongly recommend having a supply agreement drafted by a contract or business lawyer so both parties are aware of their obligations.

Do you have the necessary licenses?

Opening a food business requires you to have some sort of food business license. Food safety laws are specific to each state, so it is important that you are aware of the food safety laws in your own state, and the relevant licenses you must obtain. For example, in addition to seeking approval, in NSW, the NSW Food Authority requires most food businesses to appoint a food safety supervisor who needs to be registered.

If you are unsure of the applicable laws and regulations in your state, you should speak to one of our business lawyers today. Our business lawyers are experienced in dealing with small businesses and license applications, and will be able to assist you through the application process.

Have you thought about workplace health and safety?

Kitchens are dangerous working places. If you are employing staff members, it is recommended that you either:

  • Include an extensive workplace health and safety clause in their employment agreements; or
  • Have a lawyer professionally draft a safety policy.

Either way, you need to detail your expectations, such as expecting staff to dress properly, not to wear open-toed shoes, to use the appropriate equipment, etc., and you also need to set out a clear procedure to be followed in the event that someone gets hurt.

You will also need appropriate insurance to cover your workers.

What happens if a client has an allergy?

There is always a risk when operating any business in the food industry that clients will have allergies.

Whilst some food businesses clearly set out their ingredients for each item, sometimes it is impossible to ensure that a particular item does not have traces of something else.

For legal protection, we recommend having a strong disclaimer – for example:

“While we take all reasonable care in the preparation of each item, please consider that each item has been produced in facilities which handle a range of food products, including but not limited to, milk, eggs, peanuts, gluten, etc. It is not possible to guarantee the total absence of any of these ingredients in any of our items.”

Just for clarification purposes – each client has rights under the consumer law and having a disclaimer does not mean that you can remove yourself from all responsibility.


There are many considerations when starting your own business, especially in the food business industry. If you have any questions, or require any assistance in drafting the necessary legal documents, you should consult with a business lawyer. A good business lawyer would be able to guide you through the entire business registration and set-up process, and ensure that you are well protected in your business relationships. To speak with a contract lawyer, contact LegalVision on 1300 544 755.


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