Laws On Running A Business From Home (2025 Updated)

Working from home is now a familiar experience for many workers, and in 2025 an increasing number of business owners are choosing to run their entire business from home.

If you’re thinking of running a business from home, there are a number of legal aspects you need to be ready to consider. We’ve compiled an updated list of the basics of starting a business from home – many of which remain similar to working in an office, but with a few extra digital and remote work considerations for today’s environment.

These include:

• Structuring and registering your business
• Applying for relevant tax concessions and managing your tax admin (Master Your Tax Admin)
• Insurance
• Intellectual property protection
• Privacy compliance
• Contracts and online terms
• Shipping and logistics considerations

Running a business from home brings additional considerations, such as:

• How can I maintain my Work Health and Safety obligations in a remote environment?
• Do I need an updated Working From Home policy?
• How can I effectively monitor and support my distributed team?
• Should I implement additional privacy and cybersecurity measures?

In this article, we’ll break down these aspects and explain how you can remain compliant with employment, privacy and digital laws while running your business from home in 2025.

I Want To Run A Business From Home – Where Do I Start?

Business Structure

When you start a business, your first step is to decide which business structure will work best for you. This decision is crucial as it affects how your business operates and can impact your long-term goals.

The most common business structures include the following:

• Sole Trader: An individual operating a business under their own name and ABN. Since the business is not separate from its owner, personal liability for business debts applies.
• Partnership: Two or more individuals running a business together. This structure is not a separate legal entity, requires an ABN and TFN, and partners are jointly liable for the business’s obligations.
• Company: A separate legal entity with limited liability, which can be public or private. Companies require an Australian Company Number (ACN) and offer the benefit of protection against personal liability.

Your choice of business structure should be based on your financial capacity, team size, growth plans and the level of risk you’re willing to assume. For more insight, check out our guide on does business structure matter?

If you want to keep things small, a sole trader structure may be most suitable. However, if you have ambitious plans for growth and increased complexity, a company structure might be the better option.

Register Your Business Name

Next, you will need to register your business name. This involves searching the Business Names Register to ensure the name isn’t already in use. For additional guidance on setting up your business identity, explore our Business Name resource.

Once you have selected a name, it can be registered online. Note that if you operate as a sole trader using your own name, registration is not mandatory.

Remember, registering a business name does not equate to owning the name. If you consider your name unique and wish to secure exclusive rights, you should look into trademarking – we discuss this further below.

Apply For Relevant Taxes

Home businesses are eligible for a range of tax deductions, including expenses related to occupancy, running costs and motor vehicle trips. As tax law continues to evolve in 2025, it’s essential to stay current on which deductions apply to your circumstances. For practical advice on managing your tax obligations, our Master Your Tax Admin guide is an excellent resource.

As a business owner, you’ll need to apply for a Tax File Number (TFN) and an Australian Business Number (ABN). If your business is structured as a company, you must also apply for an Australian Company Number (ACN).

Insurance

Certain types of insurance are mandatory for some businesses. In 2025, you should consider:

• Third party personal injury insurance (if you own a vehicle)
• Workers compensation insurance (if you have employees)
• Public liability insurance (to cover potential injury or property damage)

The specific insurance requirements depend on your business activities and risk profile.

What Are My Obligations As An Employer?

Hiring staff to help run your business adds extra legal obligations. These include ensuring fair pay, appropriate leave and entitlements under the Fair Work Act 2009, all of which remain pivotal in 2025.

The Fair Work website offers tools to calculate wages, and their Best Practice Guide is a valuable resource for addressing the legal issues involved in hiring staff. Keeping up with these regulations ensures a positive workplace, avoids disputes, and enhances your business reputation.

It’s also important to verify whether your staff are classified as employees or contractors, as your responsibilities will differ accordingly.

Consumer Guarantees

Australian businesses must adhere to consumer guarantees under Australian Consumer Law (ACL). This means that goods and services must:

• Be fit for the intended purpose
• Not be misleading regarding quality or functionality
• Be delivered with full possession to the purchaser
• Include a reasonable warranty
• Match any provided sample products
• Have clear ownership and title
• Be free from unexpected charges

If your business sells goods or supplies services online or offline, it must comply with Australian consumer laws.

Supply Agreements

Supply Agreements are essential to ensure smooth business operations when working with suppliers. If your business relies on external suppliers for materials or products, this agreement helps protect your interests.

A typical Supply Agreement outlines important details such as:

• The duration of the agreement
• Delivery schedules and deadlines
• Warranties and quality assurances
• Dispute resolution procedures
• Cost structures and payment terms

This agreement is crucial for clarity between parties and provides a framework for resolving issues should any disputes arise. It’s advisable to have a legal professional draft a Supply Agreement for you; at Sprintlaw, our Supply Agreement Package is tailored to meet your specific business needs.

Intellectual Property

Intellectual Property (IP) remains one of the most valuable assets of any business. The law provides several methods to protect your IP, including:

• Trademarks
• Copyright
• Plant Breeders Rights
• Patents

For many business owners, trademarks and copyright are the most relevant forms of IP protection. Registering a trademark for your logo, name or unique symbol helps distinguish your brand in the marketplace. If you believe your brand identity is unique, consider securing it through a trademark – our Trademark Headstart Package can simplify this process for a fixed fee.

If I’m An Ecommerce Business, What Else Should I Know?

When running an eCommerce venture, additional legal considerations come into play. Since your business is primarily online, protecting your digital assets and ensuring compliance with global data regulations is vital in 2025.

Terms & Conditions

Every eCommerce website should have clear Terms and Conditions that are easy to read and understand. These terms set out the roles and responsibilities of both your business and your users, helping to prevent disputes and foster transparency.

Not only do terms and conditions offer legal protection, but they also build trust with your customers by outlining their rights and obligations.

Privacy Policies

If your business has an annual turnover of $3 million or more, the Privacy Act 1988 applies, meaning you must have a comprehensive Privacy Policy detailing how you manage and store personal information. Even if you fall below this threshold, having a Privacy Policy can enhance customer trust and ensure transparency. For further clarity on privacy obligations, you might explore our guide on When Do You Need a Privacy Policy?

What Is Considered ‘Personal Information’?

Personal information includes details such as names, phone numbers, and email addresses. In 2025, if you handle sensitive information – such as health data or racial or political details – you must take extra precautions. The Australian Law Reform Commission offers further insights on what qualifies as sensitive information.

Implementing a robust Privacy Policy not only meets legal requirements but also helps in building an open and transparent relationship with your customers.

Cyber Security

Regardless of the type of business, cyber security breaches remain a significant threat. In 2025, adopting a strong cyber security framework is more critical than ever to protect both your business and your customers’ sensitive data.

Establishing a detailed Data Breach Response Plan is essential. This plan outlines the steps to take if a breach occurs, helping to mitigate any potential damage and communicate effectively with affected parties. We’ve updated our guidance on preparing for cyber threats in the current digital landscape.

International Considerations

Selling internationally involves additional layers of legal complexity. These considerations include:

• Export and import regulations and compliance
• Securing an internationally registered trademark
• Managing different or additional shipping costs
• Adapting website security and privacy policies to regional standards
• Addressing social or cultural sensitivities
• Clarifying employee obligations when operating across borders

When drafting contracts for international business, questions of jurisdiction and applicable law become crucial – refer to our article on drafting internationally enforceable contracts for more details.

It’s advisable to engage a local legal professional when entering new markets to ensure your contracts and policies fully comply with regional requirements.

Dropshipping

Many eCommerce businesses adopt a dropshipping model, meaning that suppliers ship products directly to customers when orders are placed. This model saves you time and resources by eliminating the need to manage inventory.

However, it’s vital to fully understand the dropshipping process and ensure you comply with all legal obligations under such arrangements. A strong Supply Agreement is essential in protecting you if customers encounter issues with products, as you may still be held liable for supplier errors.

Example In Australian Competition and Consumer Commission v Ozdirect Online Brands Pty Ltd (2009), Ozdirect was found to have engaged in misleading and deceptive conduct. Although this case dates back over a decade, its principles remain relevant in 2025 for any business using the dropshipping model. The failure to uphold service agreements with suppliers can result in significant customer dissatisfaction and legal repercussions.

How Will I Fulfil My Obligations To Employees Remotely?

Even when employees work remotely, it’s important to ensure you continue to fulfil your legal obligations. In today’s virtual workplace, proactive systems and clear communication are key to overcoming any challenges. This may include:

• Clearly communicating internal policies and expected professional conduct
• Using tracked communication platforms (such as Zoom or Microsoft Teams)
• Establishing a defined dispute resolution process
• Implementing effective work from home policies

Additionally, Work Health and Safety obligations still apply for remote workers. As an employer, you must ensure that the work environment is safe by identifying hazards and taking proactive steps to minimise risks.

For instance, you might regularly conduct virtual safety inspections where employees use video calls to show their work setup, allowing you to assess for any risks or hazards.

Example A business owner hires an IT expert for their software company to work remotely. To minimise the health risks of prolonged screen time, the employer provides a standing desk and schedules regular breaks, ensuring the employee can stretch and move throughout the day.

Next Steps

Setting up a business from home requires addressing a multitude of legal considerations, such as:

• Registering the appropriate business structure
• Securing ownership of your Intellectual Property
• Applying for the right insurance and maximising tax deductions
• Ensuring all your online policies (Terms and Conditions, Privacy Policy, etc.) are compliant with current laws
• Implementing strong Contracts with suppliers and employees
• Providing appropriate reimbursements for your employees

Getting these legal matters in order is critical for the success of your business. A legal professional can ensure that everything from your registration to your contracts is correctly established, so you’re free to focus on growing your business.

Additionally, as the remote and digital business landscape continues to evolve in 2025, it’s wise to regularly review and update your legal documents to remain compliant with new regulations. Our comprehensive resources – such as the Online Business Privacy Guide and our Intellectual Property Guide – can help you stay ahead of the curve.

If you would like to discuss the legalities of setting up a business from home or need tailored legal support, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat with our friendly consultants.

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