Contents
Starting a handbag business means stepping into a space full of opportunity – and serious competition.
Handbags are one of the most popular and widely used accessories, but building a successful business takes more than just having a great product.
To stand out and grow, you’ll need a strong legal foundation. That’s where your business structure, contracts, and compliance measures come in – and that’s where we can help.
Keep reading to learn what you need to know to start a handbag business the (legally) correct way.
How Do I Start My Handbag Business Online?
It doesn’t matter whether you’re selling your handbags online, at markets, or in-store – every business starts the same way: with legal registration.
The first step is choosing the right business structure. Then, you’ll need to register your business with the relevant government bodies.
Choosing a structure can feel overwhelming when you’re just starting out, so it’s worth doing your research and understanding the pros and cons of each option. Let’s break down the three most commonly used business structures to help you decide what’s right for your handbag business.
Sole Trader
A sole trader is the simplest and most common business structure in Australia.
To set one up, you’ll need to apply for an Australian Business Number (ABN), which can be done online. If everything’s in order, you’ll usually receive it almost instantly.
From there, you may also need to register a business name. But if you’re trading under your full legal name (for example, “Jane Smith”), a separate business name registration isn’t required.
One thing to keep in mind: as a sole trader, your business is legally tied to you as an individual. This means you’re personally responsible for the business’s debts and liabilities, which is an important consideration as your brand grows.
Partnership
A partnership is a business structure where two or more people run a business together and share responsibility for its operations and finances.
Just like with a sole trader, the partnership will need an ABN and may need to register a business name (unless you’re trading under the partners’ full legal names).
It’s strongly recommended – and often essential – to have a Partnership Agreement in place. This legal document outlines how decisions will be made, how profits will be split, what happens if someone wants to leave, and how disputes will be handled. It helps prevent misunderstandings and protects everyone involved.
One thing to keep in mind: in a general partnership, all partners are personally liable for the business’s debts and obligations, which means your personal assets could be at risk if the business runs into trouble.
Company
A company is a more complex structure, but it offers greater protection and flexibility, especially if you plan to grow your business or take on investors down the track.
When you register a company (typically a proprietary limited or “Pty Ltd” company), you’re creating a separate legal entity. This means the company can enter into contracts, incur debt, and be held legally responsible – not you personally.
While this offers limited liability, it also comes with more responsibilities. You’ll need to register your company with ASIC (the Australian Securities and Investments Commission), and comply with ongoing obligations, such as keeping financial records, lodging annual reports, and meeting tax requirements.
You’ll also need to consider appointing directors, issuing shares, and having a Shareholders Agreement in place if more than one person is involved. Getting the help of a legal expert is highly recommended, they can help make sure your company is set up the way it should be.
Next Step: Protecting Your Handbag Brand Legally
When starting a business, many founders make a critical mistake: assuming that registering the business and business name automatically protects their brand.
Unfortunately, that’s not the case. Business registration simply gives you the legal right to operate – it doesn’t give you ownership over your brand elements like your name, logo, or product designs.
If you want to protect your brand, you’ll need to consider intellectual property (IP) protection. This often includes registering trade marks for your business name, logo, or any other brand assets. In some cases, particularly if you’ve developed a unique handbag design, you may even want to explore design registrations or patents.
Your options will depend on the nature of your business and the distinctiveness of your products. That’s why it’s a good idea to speak with an IP expert as early as possible.
These processes can take time, but they’re an essential part of building a strong, secure business – and they could be the difference between protecting your brand and losing it.
What Else Do You Need to Start Your Handbag Business Legally?
Once your business is registered and your brand is protected, the next step is to put the right legal agreements in place.
Without proper contracts, your business is exposed to unnecessary risk – whether that’s from suppliers, employees, or even your website users. Strong legal agreements help manage those risks, set clear expectations, and give you legal protection and peace of mind as your business grows.
Here are a few key legal documents to consider:
Privacy Policy
If you have a website that collects any personal information (like emails, names, or payment details), a privacy policy is a legal requirement under Australian law. It outlines how your business collects, uses, and stores data.
Website Terms & Conditions
These set out the rules for people using your website – covering things like intellectual property, disclaimers, and liability. They help protect your business from potential disputes with users.
Supply Agreement
If you’re purchasing materials or finished products from suppliers, a clear supply agreement will outline terms like pricing, delivery, and payment. It’s essential for keeping your supply chain secure and predictable.
Manufacturing Agreement
Working with a manufacturer? This agreement sets out expectations around production standards, timelines, pricing, and quality control – helping avoid costly misunderstandings.
Employment Agreement
If you’re hiring staff, this document covers roles, responsibilities, pay, termination conditions and more. It ensures everyone’s on the same page and helps you stay compliant with employment laws.
Workplace Policies
From health and safety to anti-discrimination and leave entitlements, workplace policies help guide how your team operates. They also demonstrate that your business takes compliance seriously.
Non-Disclosure Agreement (NDA)
Planning to collaborate with others or share sensitive ideas? An NDA ensures that your designs, plans, or supplier details stay confidential.
Do You Need To Follow Any Laws When Starting A Handbag Business?
Legal compliance is a crucial part of running a handbag business – from consumer laws to fair trading practices, it’s your responsibility as a business owner to understand and meet your legal obligations.
Here are some key areas of law to be aware of:
- Australian Consumer Law: Ensures you’re marketing your products fairly and honestly, and that your refund and warranty policies are compliant.
- Data & Privacy Law: Regulates how you collect, store, and use customer information.
- Employment Law: Covers employee entitlements, contracts, and workplace conditions.
- Intellectual Property Law: Helps you protect your designs while ensuring you’re not infringing on someone else’s.
- Fair Trading & Modern Slavery Regulations: Encourages ethical supply chains and transparency in your sourcing practices.
- State & Local Laws: These can include retail permits, signage rules, or market stall requirements.
- Environmental Regulations: May apply to how you source materials or manage product waste.
As a business owner, you’re expected to juggle many of these obligations – from ensuring your marketing isn’t misleading to checking that your supply chain doesn’t involve unethical practices, and that waste is disposed of responsibly.
The best way to stay compliant is to seek legal advice early on. A legal expert can help you understand exactly what applies to your business and how to meet your obligations with confidence, so you can focus on running your handbag business.
Key Takeaways
If you’re thinking about starting your own handbag business, don’t forget to take the legal factors into consideration – they’re an essential part of any business. To summarise what we’ve discussed:
- All handbag businesses – whether online, in-store, or at markets – must start with legal registration and choosing the right business structure (sole trader, partnership, or company).
- Registering your business and business name does not protect your brand, you’ll need trade marks or other IP protections to secure your logo, name, and designs.
- Setting up proper legal agreements (like privacy policies, supply/manufacturer agreements, employment contracts, and NDAs) helps manage risk and protect your business operations.
- If you sell online, you’re legally required to have a privacy policy and should also have website terms & conditions.
- If you hire staff or work with third parties, ensure you have employment agreements, workplace policies, and NDAs in place.
- You’ll need to comply with key laws including Australian Consumer Law, privacy, employment, IP, fair trading, environmental regulations, and local/state business laws.
- Getting legal advice early ensures you’re compliant and protected from the start, setting your handbag business up for long-term success.
If you would like a consultation on starting a handbag business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
Meet some of our Business Set Up Lawyers
Get in touch now!
We'll get back to you within 1 business day.
Top 3 Legal Mistakes
Book in a free consultation with us to discuss your legal needs.