Australian Law 101—guide for small business
Call me crazy but there is something so damn satisfying about seeing a business that is compliant with Australian Consumer Law—I get such a kick out of seeing a business set up for success.
Being compliant means having all your business legals in check. And when you do, you can pour that glass of wine at night and chill knowing you are operating securely. When you’re legally compliant, you can then focus on things like protections and professionalism.
If you’re setting up a business, read my ‘Beginners Handbook’, first, then jump over to read all about what to do to Build Your Empire & Future Proof Your Business.
Let’s now go through the Australian Law basics for your small business, below.
A business structure that fits
I said this in my ‘Beginners Handbook’, and I’ll say it again—'Just like those Louboutin’s must fit your foot or you risk falling flat on your face, your business structure must fit your needs’.
The structure of your business is determined by what fits you best. I often see business owners taking the easiest option, with the least amount of paperwork or legalities involved. Like so many things in life, easy is not always better…
Take the time to understand what your options are, so you can make an informed decision as to what is going to suit you and your business the most.
Also like many things in life, business structure can change over time—I know many people who outgrow their initial business structure, and even change more than once in a business lifetime (kind of like my wardrobe…). So, it’s important to assess your structure every year to ensure it’s ‘on point’.
It’s all in the name
We often agonise over our business name, and we might also change it over time—but with all that thinking, registering a business name often gets overlooked.
By law, you need to register your business name—if you’re using it trade and you are using it to promote yourself, it needs to be registered.
When you register your business name it is held with the Australian Securities and Investments Commission (ASIC)—the important organisation that validates your business. If someone can’t find you in an ASIC search, they may doubt your credibility…
There is one exception for all of this and that is if you are using your own name as your business name. In that instance, there is no need for you to register your name; however, if you’ve added something to your name—you know, like ‘Tracey Mylecharane Wine and Shoe Expert’ then you need to register the full name.
Speak with an accountant—a good accountant is worth their weight in gold!
You don’t know what you don’t know, but there are people out there that do know and they are there to help!
A good accountant will advise you on the best way to operate within your business structure. They can help you with the important stuff like your ABN registration, GST registration, PAYG instalments, and anything else you need for to ensure your business is operating right.
This is an important step from a compliance point of view and will ensure you are operating within the laws and regulations that govern cash flow. It’s also an integral part of the set-up of your business operations, if this isn’t done properly from the beginning it can cause many headaches down the track and we really hate unnecessary headaches.
Business partnership agreement—because you and your partners are worth it!
Having a business partner can be an incredibly rewarding proposition. You can mitigate the risk of failure and create long-lasting memories with a close friend or colleague.
To protect your friendship/business relationship, your business and your sanity; you need a partnership agreement!
I have witnessed too many legal disputes that have ripped apart family and long-standing friendships—it’s heartbreaking. I am always left feeling like it all could have been avoided, and that’s because it could. There is no limit to what clear and concise agreements can do (and what they can prevent).
Partnership agreements are tailored to you and your business, so be sure to get this sorted you’re your business lawyer, and do it at the beginning of the venture (not part way through). Clarity as to expectations of each party is key, and it will help keep your partnership a strong one!
Those sexy business legals
One of the most important things for any small business is a good set of business legals.
Not only do you have an obligation as a business owner selling goods or services to consumers, to comply with the requirements of the Australian Consumer Law, but you need to ensure you are setting yourself up for success with your clients/customers as well.
Having business legals that are tailored to your specific offerings is vital to ensuring your business is set up for success.
Business legals consist of three main documents:
Business Terms & Conditions (often also referred to as Terms of Trade, or a Business Services Agreement).
Privacy Policy.
Website Terms and Conditions.
Read more about Business and Website Ts&Cs in my ‘Business Handbook’ and if you are taking your business online you can learn a few tips about what legals you should look at in the document ‘Taking Your Business Online | 5 Tips When Selling Online.’
(If you’re feeling uncomfortable with your business legals or you don’t have any in place, I’m here to help. Click through to my Book Now page and select a FREE 20-minute appointment and let’s chat! I promise no judgement – we can set a clear and supportive pathway forward.)
Cash management process—getting paid is pretty important (and fun!)
Once your legals are properly established, your cash management process will be outlined within those documents.
The documents will properly identify your process for payment (because, let’s be honest, this is one of the fundamentals in small business!). You want to get paid, so setting your business up for success in this regard is a no brainer—don’t wait until it’s too late and you have cash flow issues that are impacting your business’ ability to grow, or worse, survive.
It may be a lot to take in and make the whole process seem daunting, but trust me, in the long run it is definitely worth it and will make operating your business so much easier. Allowing you to enjoy the added value you get from owning your own business (…family time!)
Understanding the legal jargon | Why a business lawyer is the best person to speak to.
Legal jargon crops up so often when you’re running a small business, from warranties, liabilities, and disclaimers, to force majeure and more. You can read more about this here, and check out what we have to say about legal jargon and what you can do to navigate it. My article Making Things Simple and Easy To Understand, Saving Businesses Time & Money might also be interesting to you.
Can I Make A Complaint About My Bank?
“The short answer is yes. You can complain to the Australian Financial Complaints Authority (AFCA). But only about certain things, and you can only seek certain outcomes. Read more here.
If you’re interested in reading thoughts on the Banking Royal Commission you can do so in this article and also here.
A summary of the AUSTRAC & CBA Settlement findings can also be read here.
Mirage News: ANU experts comment on banking royal commission. Experts from The Australian National University (ANU) have shared their thoughts on the final report from the Royal Commission into the Misconduct in the Banking, Superannuation and Financial Services Industry. Article published in the Mirage News on 5 February 2019 - via this link.
You can also read my article titled 'Accountability in the Banking Sector - Australia and the United Kingdom', published in the Company Lawyer (UK) journal. This piece discussed the government's BEAR (Banking Executive Accountability Regime), and draws a comparison with the similar regime in place in the UK. A copy of the journal is here.
The Real Cost of an Australian Business Lawyer
“How much does a lawyer cost” is something that gets asked a lot. And rightly so. As business owners, we all need to plan expenses, and we need to know that our spending fits within our budget. But how do you get an accurate gauge on what the real cost of an Australian business lawyer really is? This article will explore the things to consider when working out the ‘real’ cost of a lawyer (and the potential cost of not having one). Read on here.
Why did you become a Lawyer?
If it applies to you, this is a good question to keep asking yourself. If you’d like to read my answer to this question, you can read this article and there are takeaway lessons in here for everyone. What Is Success As A Lawyer? - Not Just A Question For New Lawyers also addresses some very topical points in the legal industry.
The Future of Law Firms is Flexible
The time for talk is over. Instead, it is time for the legal profession to act on flexibility. Discussion is one thing. Implementation is another. This article was originally published in Lawyers Weekly. You may also like to read Traditional Firms Must Catch Up Or Risk Further Loss.
Proposed Mortgage Broker Legal Fund
“Brokers are being asked to submit expressions of interest in whether they would support the establishment of a national mortgage broker legal fund that will determine whether legal action could be taken off the back of any potential regulatory changes.” I am part of this important initiative, read on to learn more.
7 Legal Requirements For Small Business
The number 7 enjoys a long history of positive associations across many different cultures. In the tradition of positive associations with the number 7, we have put together 7 legal requirements for small business to help you.
Protecting your Intellectual Property in a Competitive Marketplace
Marketing your business online is essential in today’s competitive marketplace, however it can also leave you exposed to people copying your ideas. That’s why protecting your intellectual property is paramount. Read this article to find out the three key things you can do when working with your business lawyer to ensure you’re protected.
What is a Dispute? Make sure you've got all your bases covered.
Despite our best efforts to avoid it, things will still come up from time to time and catch us by surprise. I talk about what a dispute is in business, and what you can do to be prepared here.
Carbon and Emissions tax? What climate change means for your business.
What does climate change mean for your small business? If you are wondering how your small business can play a role in addressing climate change and what you can do to reduce your emissions and carbon footprint, read on here to for some helpful resources addressing how you can start making a difference today.
Launching an online course? Here are the top five Ts and Cs you need to know to protect your business.
Creating and launching an online course is hard work. We know this from first hand experience! You need to protect what you’ve created with solid, robust Ts and Cs - and we offer advice on how you can go about this here.
Do you need someone to sign an NDA? | The Australian laws that surround this must-have.
The phrase NDA is thrown around a lot in business circles, but do you know exactly what it is? Dive into this article to discover what an NDA is, when you need one, and when you don’t.
Your Place or Mine? Working on Site for Clients
There are many things that you need to consider if you are working on site for clients. Ultimately, it’s your responsibility as a business owner to ensure the safety of your workplace—even when your workplace is somebody else’s property. So if you’re an interior designer, or anyone else who enters who’s work involves entering another person’s premises, we prepared this article to explain exactly what you need to know.
Is it safe to use legal documents from online?
When is using a template a good idea? The short answer is: any time you don’t need expert guidance (think cash flow projections, letter drops, reports, or following up on invoices). They have their place, sure, but they have absolutely no business in your legal documents.
Read more about what to do instead, here.