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A lot of people enjoy jewellery, whether it’s colourful bracelets for kids or rare gemstones for bigger kids – the jewellery business is an industry that can adapt to appeal to many different tastes.
Perhaps you’re a designer, creative or simply someone with great knowledge and passion for jewellery. Starting a jewellery business is a great way to propel those interests forward!
As great as it is to have an excitement for jewellery, when starting your business, it’s essential to have the right legal tools as well so you can give your jewellery business the best launch possible.
We’ll explore some legal aspects of starting a jewellery business in this article – keep reading to learn more.
How To Start A Jewellery Business
Starting your jewellery business is going to be met with making a lot of important decisions. You will likely need to think about your niche and the kind of jewellery you will be selling.
Then there are matters such as whether it be hand made or will you seek a manufacturer. Are you going to deliver them yourself or utilise dropshipping? Will you be selling only within Australia or is your business open to overseas customers as well?
It’s a good idea to think of these things and write them down in a business plan. That way, all your research and planning is in one place which can really help with staying on track.
Which Business Structure Do I Choose?
Planning out your business will also involve deciding on a business structure. Varied types of business structures are there for all types of business owners. Each structure comes with their own risks, liabilities and responsibilities. It’s up to you to decide which one works for you.
The most common types of business structures are:
There are a couple of questions you will need to ask yourself when deciding on a business structure. For example, if you’re thinking of setting up your jewellery business as a sole trader, then are you okay with personally harbouring the liabilities?
If your business is going to be in a trust, then who is in charge of the trust?
When registering a company, is your business capable of meeting all the obligations under the Corporations Act 2001? What about any future goals and obligations that may be impacted by the type of business you set up?
It’s important to take the time to seriously weigh the benefits and limitations of every kind of structure before you settle with one, as this will lay down the foundations for your business. If you’re feeling overwhelmed and need a little extra guidance, reach out to us and talk to one of our legal professionals!
Register My Jewellery Business
Once you have opted for a business structure, you will need to go ahead with registering your business.
Registering your business puts it on the government’s systems and ensures that your business is legally recognised. In Australia, all businesses are registered the same way.
Your business can be registered online with the Australian government’s Business Registration Service.
While you’re there, you can also apply for the relevant taxes that are applicable to your business such as GST. If you’re unsure, you can always do this later (but make sure you stay on top of it).
Once you have completed your business registration application and it has been approved, you will receive an Australian Business Number (ABN). Make sure you keep note of your ABN, as you will be using it for any important or official matters regarding your business.
If you are registering a company, then you will also require an Australian Company Number (ACN). Much like an ABN, an ACN can be applied for online – this is an important step as for your company to be legally recognised, it must be registered and have an ACN.
Register My Business Name
When you go to register your business and attain an ABN, you will also have the option to register your business name.
Unless you are a sole trader or a partnership business and plan on using your personal names as your business name, then registering your business name is essential. For example, a ‘Jane Doe’ operating their sole trader business under ‘Jane Doe’ will not need to register their business name.
Another exception is if you have already registered a company name and plan on using the exact same name as your business name. For example, if ‘Jane Doe PTY LTD’ is the company name that will also be used as the business name, the exemption applies.
If you don’t meet any of the exemptions, then you will need to make sure you get your business name registered. You can take a look at the Business Name Check to see what is available.
Many business owners make the common mistake of thinking that registering their business name means they own that name. This is not true – if you want to have legal ownership over your business name, then you will need to look into getting it trademarked with IP Australia.
Do I Need A Lease Agreement?
If you plan on selling jewellery through a traditional brick and mortar store and will be renting out the space to do so, we highly recommend having a Lease Agreement in place.
A Lease Agreement can help protect both you and your landlord and work to give your business the stability of a secure location for a certain period of time.
Commercial leases are great because they can be catered to suit the needs of the contracting parties. This means that there is no standard structure to a commercial lease agreement. However, it’s all the more reason why you should have a legal expert draft and review one for you.
A Commercial Lease Agreement typically covers:
- Rent
- Fixtures and fittings
- Use of premises
- Hours of use
- Equipment that is included
- Noise levels
- Termination
- Subletting
What Legal Documents Do I Need For My Jewellery Business?
Regardless of whether you require a lease agreement, there are a number of other legal agreements that you may need to consider getting in order to keep your business protected.
We’ve covered the key ones for you below.
Supply Agreement
Naturally, creating and selling jewellery requires having the right kind of materials on hand. In order to make sure you are always supplied, you might decide to utilise the services of a supplier. This is great as it can bring your business operation consistency and stability!
However, it’s really important to have a Supply Agreement in place so everybody knows where they stand and what is required of them.
A Supply Agreement generally establishes:
- The materials to be supplied
- Deliver dates and times
- Fees and payment methods
- Duration of the contract
- Termination
- Warranties
- Dispute resolution
Employment Contracts
As your jewellery business takes off, you might look into getting some staff to help you run the business. Building a team is an exciting step into expanding your business. However, in order to keep everything running well, it’s important to do this the right way.
When hiring staff to work for your business, make sure you have every staff member sign an Employment Contract. This way, both you and the employee are legally bound to your responsibilities towards one another.
An Employment Contract generally covers the following matters:
- Pay
- Hours and days of work
- Description of the role
- Duties and responsibilities
- Leave and other entitlements
- Termination
- Dispute resolution
An Employment Contract is also where you may wish to insert certain clauses to protect your business and an employee’s access to it. For example, some employers add a Non-Compete Clause to prevent ex-employees from sharing trade secrets or other inside information with competitors after their employment with them ends.
Terms And Conditions
Terms and Conditions are often used on websites as a way of giving the business more control and less liability over what happens online.
Website Terms and Conditions act as a contract between you and the user of your business’ website. It lets them know the rules for utilising the webpage and any consequences.
For example, if a user violates a condition of the agreement, you can remove them.
Website terms and conditions can also be written to let users know important business policies so they can be aware of anything important before they proceed. For example, any shipping policies or intellectual property protections can be written into a website’s terms and conditions.
What Should I Know About Product Liability?
When you’re selling jewellery, it’s crucial to be aware of where you fall on the chain of responsibility if a product turns out to be faulty.
According to the Australian Consumer Law (ACL), customers have a right to purchase products that are safe to use and do not cause them any harm. If an incident occurs, they have the right to pursue legal action and seek damages.
Product liability applies to manufacturers, however, distributors and suppliers can also be held liable.
There are, however, some steps that can be taken in order to limit your liability.
How Can I Limit Liability?
Your liability can be limited through your legal agreements. Limitation of liability clauses or exclusion of liability clauses can be used to protect your business if something goes wrong.
It’s important to keep in mind that while liability can be limited in some circumstances, these clauses don’t cover acts of negligence. Therefore, it’s important to ensure all your business practices are in line with the requirements of the ACL.
Do I Need Disclaimers?
Disclaimers can be used in various ways. Sometimes we see them on websites and even on an actual product. They are there to let consumers know that a business is not responsible for something specific.
For example, in jewellery, there are often warnings for small pieces and choking hazards which are followed by a dislamer, letting the customer know that the business cannot be responsible for any injury caused by this.
If you think your products carry a risk, then you can also look into getting a disclaimer written. Even though disclaimers may look like a simple paragraph or couple of sentences strung together, they are actually very well thought out with the relevant legislation in mind!
Therefore, it’s in your businesses best interest to get the help of a legal professional in writing a solid disclaimer for you.
What Licence Do I Need To Run A Jewellery Business?
You don’t actually need a specific ‘jewellery business licence’ in order to start your own jewellery business.
However, depending on your business operations and location, you might need to look into getting certain types of licences. For example, if you’re selling high end jewellery and want to offer your customers a glass of champagne while they browse, you may need to look into getting a licence to serve alcohol first (our Sprintlaw lawyers can assist you with a Liquor Licence if you require one).
You can take a look at the different types of licences required on the Business Licence Search.
How To Start A Jewellery Business At Home
Like many people, you might be thinking of running your jewellery business from home. It’s convenient, saves commute time and cuts down on the cost of having to rent out an office space.
Once you have sorted out the logistics and figured out that your jewellery business can be run from your home space, there are a couple of things you will need to be aware of.
What Laws Apply To Businesses Running From Home?
Rules and regulations still apply to businesses that are run from home, though they may vary a little to accommodate for the difference.
One of the first things you will need to check out are your local council regulations. Depending on the zoning of your area, you may need to gain permission from the council to run a business from home.
Next, if you’re going to have staff and plan on running a business from inside your house, then you need to make sure the environment meets workplace health and safety regulations.
According to the rules, as an employer, it is your duty to take active steps to ensure the working environment you create is safe for employees and doesn’t cause them mental or physical harm.
As this is going to be a home space, you might consider having a separate ‘office location’ in your home and look over matter such as:
- Accessibility to a bathroom
- Safety materials and equipment
- Adequate space for all staff members
- Noise and quietness
- Professional conduct despite a ‘home environment’
Safe Work Australia is one of the main regulators for workplace health and safety – we recommend getting familiar with them and their resources before moving forward.
Running An Online Jewellery Business From Home
You also need to keep the same things in mind for running a jewellery business online.
Workplace health and safety requirements still apply to employees that work remotely. Rather, the way you go about your duties as an employer will just differ. For example, you’ll need to see if your employees have a decent work from home set up or that all communication channels are regularly monitored for signs of bullying or harassment.
Make sure you have the right legal documents sorted as well, such as the Website Terms and Conditions we mentioned earlier or look into getting your intellectual property protected. If you’re collecting any kind of personal information from your customers, then you are likely going to need a Privacy Policy.
Key Takeaways
Starting your jewellery business is an exciting new venture. However, it’s really important to make sure your business is legally compliant and protected by legal measures. To summarise what we’ve discussed:
- To start your jewellery business, choose a business structure and get your business registered
- Get your legal documents like a lease agreement, terms and conditions and employment agreements sorted
- Make sure you consider your liabilities and look into limiting them
- Look up any relevant licences or permissions you may need to run your business
- Make sure your are compliant with work health and safety regulations for both in person and work from home employees
- If your business is online, make sure you have the right legal documentation there too, such as a privacy policy
If you would like a consultation on starting a jewellery business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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