1. Get the structure right

Putting the right structure in place from the start will save you money during trading and on the sale of the business.

Consult your accountant or lawyer early. For a relatively small fee an accountant can assist you in starting up your business and getting your structure in place to effectively manage your business, tax and your financial position.

Be careful with partnerships. If you enter into a partnership you should do so only after careful thought and after obtaining advice.   Any partnership arrangement should be in writing to minimise the risk.

In most cases we suggest that clients incorporate a company (often put in place with a trust) for reasons of tax effectiveness, asset protection, flexibility and Australia wide usage. But seek advice – it will be worth it. (See 5 Things you should know about…Structuring your Business.)

2. Planning and considering laws and regulations

Planning the establishment of your business will improve the chances of success and make for a smoother commencement. You need to plan at various levels. Operationally, financially and compliance with laws.

Prepare business plans and financial budgets. The business plans will assist to give your business direction and help you consider the key elements for success. The budgets will put financial information around your planning. The preparation of these will help you understand what you need to do to make your business financially sound. Your accountant can assist here.

There are a number of laws and regulations which will impact upon every business such as workplace safety, tax compliance, antidiscrimination, and some that will only affect your specific business. Know what they are and work with them. (See the list of useful Government Websites at the foot of this article to assist in determining what licences are required.)

Obtain an ABN, register for PAYG, GST and Superannuation Guarantee and obtain Workplace Insurance. Where you need a licence to conduct a business or need compliance with specific legislation, codes or standards make sure you know what these are and set up a simple way to comply. 

3. Put it in writing

Your business will make sales, provide services and enter into contracts or arrangements with others. All of these should be in writing. While there is an initial cost, this will save you time and money in the long run.

Protect your business and put your employment arrangements in writing. This will help you comply with the legal obligations and make sure both you and your staff understand their role and obligations.

Prepare some trading terms and/or standard agreements. These will minimise your risk and ensure greater clarity in your trading relationships. 

Save time, pain and money... put it in writing.

4. Trading Name and Brands

Before you start trading as a business in Australia you need to have a trading name. You can trade in your own name, partner’s names, a registered business name, or a company name.  While a company has higher costs it provides Australia wide use and offers other structural advantage. (See 5 things you should know about...Structuring your Business.)

If your business has developed brands, logos or has some specialist technology or processes you should protect these by registration either as a trademark, registered design or patent.   These are, and will become, significant business assets which you must protect.

Before you start using a trading name or brand make sure that someone else is not already using it to avoid the risk of litigation.

5. Getting advice before committing to significant obligations, guarantees, leases and finance arrangements

There are a number of significant legal documents that will need to be signed when you are starting your business. Leases, finance arrangements, guarantees, franchises and distribution arrangements are common.   All of these agreements are important and often complex. You should obtain legal advice before signing them.

Be careful with personal guarantees. It is common for landlords, lenders and sometimes suppliers to require a guarantee if the lease or loan is to a company. A guarantee will place a personal liability on you if the company or contracting party cannot pay or otherwise breaches obligations. Therefore, if you can avoid entering into a guarantee, you should. You will need to get independent advice before signing these documents.

Do not sign any legal documents without getting advice, this risk is simply too great.