Question: I want to expand my business using licensed contractors – is it a good idea?Answer:
Yes. One way to expand your business is to hire licensed contractors to sell services using your brand name. Benefits include that they are not employees who must be paid a regular salary and entitlements. You can pay contractors for specific tasks, or they can get their own clients and pay you a licence fee. They are essentially running their own business, but are using your branding and business concept.
You must assess (i) whether the worker is an employee or contractor and (ii) whether the contractor needs to be paid superannuation. There are tax requirements you must meet, with tests set out by the Australian Taxation Office (ATO), which can be accessed online (insert link). It is important to get the ATO tests right, so that you end up paying the correct entitlements and comply with relevant employment and tax law.
Hiring licensed contractors to let them use your branding requires a contractor’s agreement with an intellectual property licence. The licence sets out what intellectual property you are licensing them to use, how they can use it, the business’s and the contractor’s obligations, the allocation of work, subcontracting and non-compete clauses to protect your business from competition.