In Short
- Choose the right business structure and register your handyman business with the relevant authorities, including for tax and insurance purposes.
- Use strong legal agreements like Service Agreements and Employment Contracts to protect your business and clarify responsibilities.
- Make sure you have the proper insurance, follow privacy laws, and meet your obligations under workplace legislation.
Tips for Businesses
Before launching a handyman business, get clear on your legal obligations around contracts, insurance, and privacy. Use written agreements for all work and staff arrangements. Seek legal or accounting advice to ensure your business structure, documents, and operations comply with current Australian laws.
Starting a handyman business involves more than just practical work; it is also essential to consider the legal aspects. While the hands-on tasks might seem simple, overlooking the legal aspects can create serious issues down the line. This article highlights the key legal factors you need to keep in mind when launching a handyman business.
Business Structure and Registration
The first legal step in establishing your handyman business is choosing an appropriate business structure. This decision has significant implications for your legal and tax obligations.
As a sole trader, you will operate under your own name and be personally responsible for all aspects of the business. This structure is relatively simple to set up, requiring only an Australian Business Number (ABN) application through the Australian Business Register.
Alternatively, forming a company provides personal asset protection but involves more complex legal obligations. You will need to register with the Australian Securities and Investments Commission (ASIC), obtain an Australian Company Number (ACN), and comply with ongoing reporting requirements.
Regardless of the structure chosen, ensure you register for Goods and Services Tax (GST) if you expect your annual turnover to exceed the current threshold. Consulting with a legal professional or accountant can help you understand the implications of each structure and ensure compliance with all registration requirements.
Contractual Agreements
Robust legal agreements are essential for protecting your business interests and clarifying relationships with clients and employees.
1. Service Agreement
A well-drafted Service Agreement is crucial for defining the terms of your relationship with clients. This document should cover several key areas:
- Scope of Services: Clearly outline what your handyman business will and will not do. List the services offered, such as carpentry, plumbing, electrical work, and painting, along with the areas served and any excluded services. Being specific helps avoid misunderstandings and potential disputes.
- Pricing and Payment Terms: Clearly state your fees and the method of charging them. Include your pricing structure (per service, hourly rate, or flat fee), standard rates for different services, minimum call-out fees, additional charges for extra services, payment methods accepted, payment due dates, and any late payment fees or interest charges.
- Liability Limitations: Include reasonable limitations on your liability, such as limiting liability to the cost of services provided, excluding liability for indirect or consequential losses, and clarifying that you are not responsible for pre-existing property damage.
- Termination Clauses: Include clear terms for ending the service agreement, such as notice periods required for termination, circumstances allowing immediate termination, and any fees associated with early termination of long-term contracts.
- Equipment and Materials: Specify who is responsible for providing equipment and materials, including tools, supplies, and any specialised equipment required for specific jobs.
- Access and Working Conditions: Include provisions regarding access to the client’s property, including requirements for access and procedures to follow if access is not possible.
- Warranties and Guarantees: If offered, clearly state the terms of any workmanship guarantees and their limitations.
- Dispute Resolution: Include a section on how disputes will be handled, often requiring mediation before any legal action can be taken.
2. Employment Agreements
If you plan to hire staff, comprehensive Employment Agreements are legally required. These should clearly outline:
- roles and responsibilities;
- remuneration and benefits;
- working hours and conditions;
- leave entitlements; and
- termination procedures.
Ensure these agreements comply with the Fair Work Act 2009 and any applicable awards or enterprise agreements. You may also engage workers as contractors, in which case, other considerations will apply.
Continue reading this article below the formInsurance and Liability
Adequate insurance coverage is not just a business precaution but often a legal requirement. Key insurance types to consider include:
- Public Liability Insurance: This is crucial for protecting against claims of property damage or personal injury caused by your business activities.
- Professional Indemnity Insurance: This protects against claims of professional negligence or errors in your work.
- Workers’ Compensation Insurance: This is mandatory if you employ staff, protecting both you and your employees in case of work-related injuries or illnesses.
- Vehicle and Equipment Insurance: Ensure your work vehicles and equipment are properly insured for business use.
Privacy and Data Protection
It is best practice to collect client information in accordance with the Privacy Act 1998 and the Australian Privacy Principles. This involves:
- developing a clear privacy policy outlining how you collect, use, store, and protect client information;
- implementing robust data security measures; and
- training any staff on privacy procedures and obligations.
If you are required to comply with privacy laws, failure to do so can result in significant penalties; therefore, it is advisable to seek legal advice when developing your privacy practices.
It’s now easier than ever to start a business online. But growing and sustaining an online business requires a great deal of attention and planning.
This How to Start an Online Business Manual covers all the essential topics you need to know about starting your online business.
The publication also includes eight case studies featuring leading Australian businesses and online influencers.
Key Takeaways
Starting a handyman business involves navigating the legal aspects of the business. From selecting the proper business structure and obtaining necessary permits to drafting strong contracts and adhering to regulations, every step has legal implications that require careful attention and consideration.
While this article covers the primary legal considerations, it is highly recommended to consult with our lawyers. They can offer personalised advice to ensure your business is legally sound, helping you set up for long-term success and compliance in a constantly evolving market.
If you are starting a handyman business, our experienced business lawyers can assist you as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
A handyman business should have a detailed Service Agreement that outlines the scope of services, pricing, liability limits, and the process for handling disputes. If hiring staff, you also need Employment Agreements that comply with the Fair Work Act to outline roles, pay, hours, and termination procedures.
You need Public Liability Insurance to cover property damage or injury. If you offer advice or specialised services, Professional Indemnity Insurance is also essential. Workers’ Compensation Insurance is required if you employ staff. Ensure that vehicles and tools are insured for business use to avoid unexpected expenses.
We appreciate your feedback – your submission has been successfully received.
