Thinking of starting a business? Or perhaps you’ve already got one up and running? Either way, when it comes to doing business, there’s a lot more to it than just selling and profiting.
Every business needs to comply with all the relevant laws and regulations before it can truly achieve its goals. Understanding the regulatory compliance requirements for your industry is also crucial.
The legal and business world are very much connected. If you want to run a good business and avoid penalties, it’s important to understand your legal obligations and stay compliant.
What Laws Apply To My Business?
Businesses need to comply with a huge range of laws, some of which will differ based on the type of business you have, the industry you are in and the regions you operate in.
This includes regulations regarding taxes, registration, employee relationships and much more. There’s a lot of ground to cover, so let’s get started.
All businesses start the same way – by getting it registered! When you register your business with the Australian Securities and Investments Commission (ASIC), your registration requirements will differ based on your business structure and the taxes you need to apply for.
For example, if you’re a sole trader or partnership, you’ll need an ABN. However, if you’re a company, you’ll need an ACN in addition to your ABN.
Let’s go through this in more detail.
Australian Business Number (ABN)
Every business will need an Australian Business Number (ABN). It’s relatively easy to get an ABN – the application process can be done entirely online. You will need to pay a small fee, and once your application has been approved, you will receive your ABN via email.
A lot of the formal processes your business will be subject to require using an ABN, so it’s important to get this sorted early on. This is because it identifies your business.
If you are registering a company, then you will also need an Australian Company Number (ACN).
Tax File Number (TFN)
A Tax File Number (TFN) is also required. If you are operating as a sole trader, then you can use your own TFN. For all other business types, you will need to get a separate TFN for your business which will come into use when dealing with taxes and investments.
Goods and Services Tax (GST)
Goods and Services Tax (GST) is charged when a business has an annual turnover rate of more than $75,000. If you feel your business is close to hitting that goal or will definitely cross that mark, then register for GST in order to remain legally compliant.
Register Your Business Name
When you’re getting your ABN, you will also be able to register your business name at the same time. In order to make sure the name you want isn’t taken, you can look at the Business Names Register before you get started.
Here at Sprintlaw, we often get questioned about whether a name that is registered belongs to the business. The answer to that is no! Registering a business name does not grant you ownership of that name.
If you want exclusive ownership of your business name, we suggest you get it trademarked (we’ll cover this in more detail later).
Privacy Obligations For Businesses
You will need to meet privacy obligations if your business is going to be functioning online in any way. Both Australia and overseas regions have their own privacy laws requirements, so it’s important to be aware of them for each country your business is to operate in.
Privacy Act 1988
The Act also sets out certain rules around how to destroy certain records and what to disclose to consumers when you use their personal information. Our expert privacy lawyers are more than happy to chat you through your obligations under this legislation.
General Data Protection Regulation (GDPR)
For example, the GDPR provides a right to be forgotten in the EU, whereas Australian privacy law provides no such right (although we do have similar ones, which we’ve written about here).
If your business is going to expand overseas, make sure your privacy policies reflect the internal regulations of those regions.
Privacy can be a complicated subject – feel free to talk to a legal expert for reliable Privacy Advice.
Fair Trading Laws
Fair trading laws are there to protect consumers. The relationship between businesses and consumers is often not an equal one, where consumers can have less power than businesses.
Fair trading laws have been established so that businesses do not engage in unfair trading practices which then cause harm or loss to consumers.
Australian Consumer Law
The Australian Consumer Law (ACL) covers a number of things. It essentially holds businesses to a certain standard of practice, ensuring they don’t engage in the following:
- Setting unfair contract terms
- Misleading or deceptive behaviour
- Dismissing consumer guarantees
- Never providing a warranty
These matters are all considered the right of every consumer and businesses that fail to comply are in breach of the ACL.
Competition and Consumer Act
The Competition and Consumer Act 2010 regulates the conduct of businesses when they are engaging with suppliers and other businesses. It also covers other important matters regarding consumers, such as advertising and marking prices.
For example, not displaying prices correctly would be a breach of the Act.
Fair trading laws also have strict labelling requirements. The rules around labelling you must comply with depend on the type of products you sell. The specifics are bound to differ, however, all labels need to be transparent, open and honest in order to be legally compliant.
Not doing so can amount to misleading or deceptive conduct, which is a breach of the ACL.
Warranties And Refunds
Consumers are entitled to warranties and refunds under the ACL. As a business owner, you must have a system in place for when a consumer is not satisfied with their product or something has gone wrong with it.
It’s best to be prepared for such scenarios so you can be effective in dealing with them.
When running your own business, you may choose to employ staff in order to help out with operations. This is a great step in expanding your business, however, it’s also vital that your practices with employees are meeting regulatory standards.
National Employment Standards
The National Employment Standards (NES) cover the minimum awards and entitlements that employees are allowed to have. The standards will vary based on the industry and the specific job. As an employer, it’s your duty to make sure your employees are receiving the correct entitlements.
The NES cover the following:
- Converting from casual to full time employment
- Parental leave
- Maximum hours
- Public holidays
- Personal or carer’s leave
- Long service leave
- Domestic violence leave
- Community service leave
- Flexible work requests
All employers need to give new employees a copy of the Fair Work Information Statement before they commence, and this should include the NES.
These entitlements and details around employment conditions should also be covered in detail in Employment Contracts you have with your employees.
Work Health and Safety
Work health and safety is all about making sure your employees have the best possible environment to work in. This means their workspace should not harm them mentally or physically.
If your employees work from home, then you still have a duty to make sure you’ve done everything in your power to ensure they have a safe work space. All of this is covered by Safe Work Australia, so it’s important to read into your obligations under WHS laws. .
Employee Or Contractor?
Businesses often choose to hire contractors to complete certain projects or stay on for a limited amount of time. Contractors are external employees of the business, and therefore, they often don’t have the same entitlements and even requirements as internal employees.
Contractors can begin to look like internal employees, though. So, it’s extremely important to distinguish them as contractors right from the beginning of the relationship.
A Contractors Agreement can aid with this. If a contractor makes a valid claim in arguing they are actually an employee, you may end up owing them employee entitlements.
Do I Need Workers’ Compensation Insurance?
Sometimes things go wrong and workers can get injured at work. When this happens, workers compensation insurance can aid in ensuring your business doesn’t go bankrupt from a claim.
In NSW, it’s compulsory for most employers to have workers compensation insurance. The rules regarding this vary depending on the state – click here to know more.
If an employee feels their employment was terminated in a manner that was not fair, they may bring forward a claim of unfair dismissal with the Fair Work Commission. Once an employee submits a complaint, the matter is usually investigated before a conclusion is reached.
Small Business Fair Dismissal Code
Small businesses (a business with less than 15 employees) have some protection when it comes to unfair dismissal claims. The Small Business Fair Dismissal Code doesn’t allow employees that worked with the business for less than 12 months to bring forward an unfair dismissal claim.
In regards to all other employees, as long as the business followed the code, it should be shielded from unfair dismissal claims as well.
If your business starts doing well, you might think of expanding by opening a franchise in another location. Franchising can be a very exciting opportunity for both franchisors and franchisees.
However, it’s important to follow the relevant rules and regulations to make sure everything runs smoothly. For example, you need to ensure you’re compliant with the Franchising Code of Conduct and that you have all the correct franchising documents.
Franchising Code of Conduct
The Franchising Code of Conduct is the main regulation that franchisors and franchisees need to follow.
It covers matters such as the disclosure document, information statement, obligations of both parties, record keeping obligations and contractual terms – it’s important to familiarise yourself with the requirements of it.
Intellectual Property Laws
Securing your intellectual property can save your business from unwanted disputes in the future. This ensures that you retain legal ownership of your business’ intangible assets, such as logos and slogans.
Trade marks, copyright, trade secrets and patents are the most common intellectual property protective measures – we take a look at two of them below.
Trade Marks Act 1995
Trade marks are regulated by the Trade Marks Act 1995. According to the Act, there are a wide number of things that can count as a trade mark. Sounds, colours, scents, names, logos and phrases can all be trademarked as long as it isn’t too descriptive. In addition to this, it must be distinctive and unique to the business it represents.
Once you register a trade mark, that form of IP will legally belong to you. This means you can use it as you wish, or licence it to another party.
We mentioned owning your business name above – if this is something you’re interested in, you will need to file a trade mark application for the name with IP Australia. If the application is approved, you could own your business name for 10 years (after which it can be renewed).
Copyright Act 1968
Unlike a trademark, if you want something to be protected by copyright, you do not need to go through an application process. Copyright is applied automatically to any original work, giving the owner the right to utilise, licence or sell their work.
Even though copyright is applied automatically, this doesn’t offer much protection. The use of contracts and licences can aid in protecting any copyrighted materials from potential infringements. It’s best to talk to a legal professional to discuss your options.
What Policies Do I Need?
Policies are the agreements a business has with others. Good policies can not only protect your business, but it can also make sure you and your customers are on the same page.
We’ll go through some common business policies below.
Terms And Conditions
Terms and conditions for your business is not a legal requirement, however, it can help in setting the tone for the relationship between you and your customers.
Terms and conditions will determine the rules and expectations for entering your businesses premises or website. It also gives you the control to make decisions regarding customers, such as the ability to block a customer that is not abiding by the behavioural standard in order to protect other customers.
It can also aid in limiting your liability for risks that can often be out of your control.
It’s important to have a good returns policy as customers may want to send an item back for any reason. Your returns policy can lay out the process, any limits and conditions associated with returning the items (as long as it is consistent with consumer law) so customers can be aware of it when they make a purchase.
It’s also wise to have made this accessible and easy to read for consumers so they can take a look at it.
Following legal regulations is a huge part of running a business. There’s even the regulatory compliance that differs per industry to consider.
Thankfully, we have a comprehensive list of industries we can consult you on – contact us to know more!
To summarise what we’ve discussed:
- Registering your business will involve applying for an ABN, ACN, TFN, taxes like GST and getting a business name
- It’s essential to understand your Australian and overseas privacy obligations as well
- Your business needs to be compliant with all fair trading laws, such as labelling requirements
- If your business will be hiring employees, it needs to be consistent with employment laws, workplace health and safety, the NES as well as look into workers compensation insurance
- For small businesses, follow the Small Business Fair Dismissal Code to keep your business protected
- Franchisors and franchisees need to follow the Franchising Code of Conduct
- Securing you intellectual property is another way to offer your business more protection
If you would like a consultation on the legal regulations in business, you can reach us at 1800 730 617 or email@example.com for a free, no-obligations chat.
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