7 Legal Requirements For Small Business
The number 7 enjoys a long history of positive associations across many different cultures. There are 7 days in a week, 7 colours in a rainbow, and 7 wonders of the ancient world.
In the tradition of positive associations with the number 7, we have put together 7 legal requirements for small business to help you.
1.Choose a Structure that works
It is important to choose the best business structure that suits you and the needs of your business. Whether a sole trader is right for you; or if a company structure, a partnership, or joint venture better suits your needs, identify this early on and prioritise getting the structure set up properly.
2. Have properly tailored Business Terms and Conditions
Business terms & conditions set out the terms that you will be trading by. They cover things like the obligations of the parties; your fees; how & when you will be paid; delivery dates for services or products and much more. They are designed to form an agreement (or contract) between you and your clients/customers, so that if anything goes wrong, you can rely on the terms & conditions to protect your business, and to hopefully avoid a long and protracted (and expensive) dispute.
If you are a service provider you need to provide your Business Ts and Cs to your customers/clients up-front, and with plenty of time for them to be reviewed and accepted. It is good practice to provide these via email in a pdf (or similar) when you issue your quote or proposal, for example.
If you operate an e-commerce business, or you offer goods/products for sale online, you need to be sure that you have incorporated into your website terms & conditions, appropriate details which relate to this sale component of your business.
3. Ensure you have Website Terms and Conditions
The Australian Consumer Law (‘ACL’) sets out the legal rules for your business to protect Australian consumers (your customers/clients).
In order to comply with the ACL you will need Website T&Cs. Here are some examples of why you need Website Ts and Cs:
If someone relies on what you say in your blog as ‘advice’, and you don’t have Website Ts & Cs limiting your liability and making it clear that the information you are providing is general in nature only, they may be able to make a claim against you if things go wrong.
If you sell goods and services via your website, the ACL clearly requires you to publish your Website Ts & Cs so they are easily accessible by users, and it is important that users are able to review these before continuing to use your website and purchase from you. Failure to comply could result in a legal claim against you if a consumer has an issue with your products or services.
4. Comply with Privacy Laws
You must comply with the Australian Privacy laws. If you collect personal data on your website, such as names and email addresses for an email list or newsletter (or a ‘contact us’ page), or if you obtain payment details from people who make a purchase, then you need to have a Privacy Policy on your website which clearly sets out what you do with this information and how you retain it.
5. Comply with Employment Laws
You have a legal obligation to treat your team the right way (that is, as a contractor or an employee). If you have a team in your business, whether they are employees or contractors, you need to be sure you have engaged them correctly; know what you are required to pay them and what their legal entitlements are, and you need to have proper employment agreements or independent contractor agreements in place.
6. Protect your Intellectual Property
If your business needs to have exclusive use over your business name or tagline, for example, then you need to be proactive with this and seek advice on whether you can apply for a trademark.
If your business produces original content or material by way of articles, photography, design, or blogs, then you need to be across your rights in respect of your copyright in this material, and if you have this published on your website make sure you have drawn attention to your copyright in your Website Terms and Conditions.
7. Manage Risk: Have Insurance and Comply with Tax Obligations
Insurance and risk management is a must. For example, some businesses may require you to hold certain qualifications, follow Codes of Conduct and/or hold professional indemnity insurance.
It is always important to ensure you hold the necessary insurance policies for your business.
If you conduct a business, you will need to comply with tax obligations. At a minimum you will need an Australian Business Number (ABN) and a Tax File Number (TFN). You will also need to register for Goods and Service Tax (GST) and if you employ team members, pay as you go (PAYG) withholding.
If you have questions about any of the above – or any other aspect of building your business and launching online – please reach out! We would love to help.
You might like to read more of our tips in our Ultimate Guide for Small Businesses and our Australian Law 101 - Guide for Small Business resource.
