Fulfilling your legal obligations when you are opening a new business can be an onerous task. Set out below is a brief overview of what you need to know when starting a new business.
Tax and Business Registration
For starters you will need to be familiar with the following (even if it is only to confirm that they are not relevant to your business):
- An Australian Business Number (ABN)
- Fringe Benefits Tax (FBT)
- Goods and Services Tax (GST)
- Pay as You Go Withholding (PAYG)
- Tax File Number (TFN)
- Pay-Roll Tax
If you don’t have an accountant then it is generally recommended that you get one as an accountant, with a business lawyer, will help you comply with the legal and taxation obligations of your business.
Understanding the Australian Competition and Consumer Act 2010
The Australian Competition and Consumer Act is the key piece of legislation used to regulate Australian businesses. It is designed to promote fair trading and competition and to protect consumers. You will need to be familiar with this legislation or consult a business lawyer if you want advice on how to comply with it. If you don’t and you are found to have breached the Act then you could be subject to heavy penalties, which include fines and imprisonment.
The Australian Competition and Consumer Act regulates:
- Misleading advertising
- Misleading or deceptive conduct
- Product labelling
- Product safety
- Unfair market practices
- Enforcement of industry codes
- Price fixing
- Industry regulation
The Australian Consumer Law
The Australian Consumer Law (ACL) is part of the Australian Competition and Consumer Act. You will also need to familiarise yourself with these regulations or you could face heavy penalties.
The ACL regulates:
- Misleading and deceptive conduct
- Unsafe products
- Importer and manufacturer liability
- Unfair or unconscionable conduct by businesses in their dealings with customers
- Anti-competitive conduct
- Market sharing
- Abuse of market power
Industry Codes of Practice
In addition to the obligations of a business under the Australian Competition and Consumer Act, there are industry codes of practice which you may be required to follow. Some of these codes of practice are voluntary, meaning you can voluntarily subscribe to them, while others are mandatory and therefore must be followed. You can check with the Australian Competition and Consumer Commission (ACCC) for more information.
Registrations and Trademarks
You should consider trademarking your brand. Trademarking gives you legal ownership over your brand and stops others from using it. LegalVision can assist you with trademark registration or give advice to you on your options.
Do you Need Licences and/or Permits for your Business?
Almost every business requires a licence or permit of some description. This includes licences or permits for:
- Environmental approval
- Zoning approval
- Liquor licence
- Fundraising licence
Liability basically means the risk of you or your business being sued by someone. For example, employee related liability (e.g. discrimination, harassment or unfair dismissal) or liability if somebody is injured on your premises. In order to reduce your liability exposure you should consider taking out insurance and having an experienced business lawyer draft a set of business terms and conditions which protects your business..
Basic Record Keeping
To meet your basic legal and taxation obligations you must keep the following records:
- Company register (if your business is operated by a company)
- An accounting system which records dates of payments and receipts
- Bank accounts
- Employment records, including details of remuneration, hours of work, superannuation, employment type, employment termination and other employment details
- Records of work, health and safety training by employees
- Sales records
- Work, health and safety incident and risk register
These records will help you comply with your legal obligations and enable you or your accountant to prepare a tax return and financial statements for you and your business.
Setting up a business is a complex process. It’s a great idea to have an initial chat with a business lawyer who can provide initial, as well as ongoing, advice on how to ensure your compliance with all of your legal obligations.