Small businesses in Australia commonly deal with legal concerns related to how they’re set up, handle contracts and compliance, and other things that will dictate how they’re taxed. As if building a startup isn’t already complicated, a small business owner has to deal with such problems, too. Good thing there are professionals who can help, including a taxation lawyer. Because legal risks can cause major headaches, it’s better to avoid them altogether.
Business Structure and Registration
Choosing the right company structure is one of the first and most important legal decisions you have to make. Since it affects your liability, tax obligations, and how you operate, this must be done with great care.
- There are different legal and tax implications for a sole trader, partnership, company, or trust
- Disputes and liability issues can arise from partnerships not formalised
- It is costly to switch to the correct structure if you started with the wrong one
- Registering a business name doesn’t give you legal protection like a company or trademark would
Employment Law
Hiring staff comes with legal responsibilities you’ll be accountable for. As simple as misclassifying workers will get you into trouble, more so if you ignore workplace laws.
- Make sure to correctly classify between employees and contractors to avoid penalties
- Strictly follow the Fair Work Act as it sets the minimum standards for pay, leave and conditions
- Establish a proper and legal process of employee dismissal to avoid issues with unfair dismissal claims
- Every employee, including temporary or casual workers, must have a written employment contract
- There should be clear and updated policies around discrimination, bullying and harassment
Contracts and Agreements
Any agreement, whether between you and an employee or a vendor, must come with a written contract. It’s one of the best ways to keep disputes out of all your dealings.
- Always document terms and ensure both sides agree on them
- Make sure the contract outlines a clear scope, payment terms, timelines and dispute resolution
- Thoroughly review all supplier and service agreements before signing
- Avoid conflicts that can arise from late payments, scope creep and unclear deliverables
Intellectual Property (IP)
IP may not seem important for small businesses, but it can become a problem if another company copies your logo or accuses you of ripping them off.
- Better protect yourself by registering your business name and logo as trademarks
- Copyright automatically protects original work, but proving ownership isn’t going to be easy
- Make sure your branding, marketing and other business collateral aren’t infringing on someone else’s IP
- Establish clear IP ownership in writing for any collaboration projects
Taxation and Financial Obligations
One thing a small business must avoid is having problems with the taxman. The Australian Taxation Office doesn’t look kindly if you get your tax wrong, so make sure you’re updated with your tax obligations to avoid penalties. Set up financial management solutions when necessary.
- Check if you need to register for GST and comply
- Lodge Business Activity Statements (BAS) on time
- When required, pay superannuation, PAYG withholding and payroll tax
- Accurately record everything, both on paper and digitally
- Hire a registered BAS or tax professional to ensure compliance
These are just a few legal issues small businesses in Australia or a small business owner may face, all of which are part of running a business. The good news is that all of these legal risks are avoidable with the right planning and advice. Take time to know your obligations and ensure compliance with the help of professionals. Coleman Greig Lawyers, for example, can help you with commercial taxation advice.
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