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When you think about running a business, it’s important to consider the laws that come with being part of the business world. The regulations your business needs to follow may be impacted by the scale of your business, as well as the industry it belongs to. However, there are some standards that every business needs to comply with, regardless of any other factors.
Let’s take a closer look at the standards that all businesses need to comply with in Australia.
What Does Legal Compliance Mean In Business?
First up – what exactly does legal compliance mean in business?
In business, legal compliance means there are certain rules and obligations that a business must follow. Much like being an ordinary citizen, you understand you have certain duties and obligations towards yourself and others.
Businesses have their own set of duties and responsibilities they need to abide by. These regulations are there for various reasons – to ensure consumers are protected, employees have rights and private information is being kept responsibly.
However, legal compliance for businesses doesn’t just benefit those parties that interact with the business. It also aims to keep your business protected. Following rules such as properly registering your business and ensuring you’ve got the correct legal documents can go a long way when it comes to saving your business from pesky troubles.
What Happens If A Business Doesn’t Comply With Regulations?
When a business doesn’t comply with regulations, there are consequences. The nature of these consequences will depend on the breach that has occurred, along with the severity of the violations.
Remember, intention rarely ever matters when a business breaks regulations. Even if your business accidentally breaks a rule, there are almost no circumstances where that will free you of any repercussions. Therefore, it’s of utmost importance to know what your legal duties are as a business and take reasonable measures to abide by them.
Aside from legal consequences, if your business doesn’t comply with regulations then it is likely to get a bad reputation in the community. A terrible reputation can make others refuse to work for or with your business, causing you to lose out on potential partners and employees. Moreover, when consumers hear of a business’s bad reputation, they tend to avoid that place.
As such, it’s in your business’s best interest to be well aware of the regulations that impact it and follow them.
What Laws Does My Business Need To Comply With?
So, exactly what laws does my business need to follow?
Complying with the general standard means that your business will need to look out for regulations relating to a number of different things.
It’s important to keep in mind that while these regulations apply as a standard to most, if not all Australian businesses, the way in which you abide by some of them may differ to another business.
For instance, if you’re required to keep certain information about your clients private, then you might consider having your employees sign an NDA. However, other business owners might simply have a confidentiality clause in their Employment Contracts. It all really depends on what works best for your business.
To figure out the best way your business can be legally compliant, it’s important to chat with a legal expert. A legal expert will be able to guide you through real, actionable steps that are right for your specific business.
For now, here are some of the standards all Australian businesses need to comply with.
Business Registration
To run a business in Australia, you need to register it.
The registration process will depend on the kind of business you will be registering. Most commonly, businesses tend to get registered as a sole trader, partnership or a company.
To register as a sole trader or a partner, you simply need to apply for an Australian Business Number (ABN). For partnership business structures, each partner will need their own ABN. Once that’s done, you can opt to Register A Business Name if you’re using something other than your personal name(s).
To Register A Company, the process is a little more complex. While getting an ABN is free and doesn’t take much time, a company is pretty much the opposite. All Australian companies are registered with ASIC and you’ll be required to figure out matters like shareholders, directors and governance before you even start the application to register your company. While all of this may seem like a bit of a hassle, registering a company is your best bet for legal protection.
Once a company is registered, it becomes a legal entity on its own. Due to its legal status, a company doesn’t need to be tied to you personally – which protects your liabilities. Sole trader and partnership business structures don’t allow this kind of legal protection. If you register as a sole trader or in a partnership, your business will be attached to you personally which can be extremely consequential if something happens to go wrong with the business.
If your business is a serious endeavour and you have plans to keep growing it in the future, then we always recommend setting it up as a company.
Australian Consumer Law
Whether your business is selling a product, service or both, it will need to abide by the Australian Consumer Law (ACL).
The ACL sets the standard for consumer and business interactions. Everything from the labelling of your products, quality, pricing and promotions is determined by the ACL, so it’s necessary to be familiar with it.
We understand it’s not easy to understand the entire ACL document – in fact, a lot of lawyers that don’t specialise in consumer law often struggle with it! It’s always best to have a chat with an expert in Consumer Law, they’ll be able to provide the right kind of guidance for ensuring your business is compliant with the ACL.
Employment Regulations
Whether your business plans on hiring employees or already has them, being someone’s employer means there are certain employment standards your business will need to comply with.
Employment standards generally refer to making sure your employees are receiving the correct entitlements such as minimum wages, paid leave and breaks. Along with this, it’s important to establish a positive work environment that doesn’t cause harm to your employees, either physically or mentally.
One basic step you can take towards securing your employees rights is putting them down in an Employment Agreement, this way you and your employees can be on the same page. It’s also a wise idea to get other legal documents such as a Workplace Policy, so you can be clear on the kind of professional conduct you’ll be expecting in your workplace.
For more information on how you can fulfil your duties under employment regulations, have a chat with one of our Employment Law experts.
Data and Privacy Laws
As a business, it’s also important to comply with data and privacy regulations. Running a business means that you’ll have access to information regarding customers, clients and even your staff members. This information doesn’t necessarily need to be anything extremely sensitive – even if it’s just something simple like emails and phone numbers, you’re still required to take steps to protect the information your business receives.
For example, if your business has a website that collects any kind of personal information from its visitors, then you’re legally required to have a Privacy Policy in place. To protect other kinds of information, you may need to get certain parties to sign a Non-Disclosure Agreement (NDA).
Naturally, the systems for each business and their specific privacy obligations are going to be different. That’s why, it’s always a good idea to talk to a Data and Privacy Expert, so they can guide you on the best ways to keep up with your data and privacy legal obligations.
Next Steps
There are certain standards that all businesses need to comply with. A legal expert can help you figure the best way to comply with these obligations so your business can stay legally compliant. To summarise what we’ve discussed:
- All Australian businesses must comply with certain standards, and legal experts can provide guidance on specific actions for compliance
- Legal compliance in business involves following rules and obligations to protect consumers, employees, and private information, ultimately safeguarding the business itself
- Non-compliance with regulations can lead to consequences, regardless of intent, and may result in legal repercussions and a damaged reputation within the community
- Business registration is essential in Australia, requiring an Australian Business Number (ABN) for sole traders or partnerships and a more complex process for companies, offering legal protection for the latter
- The Australian Consumer Law (ACL) dictates standards for product labelling, quality, pricing, and promotions, necessitating familiarity or consultation with Consumer Law experts.
- Employment regulations mandate businesses to ensure proper treatment of employees, covering aspects such as minimum wages, leave, breaks, and a positive work environment, which should often be outlined in employment agreements and workplace policies
- Data and privacy laws require businesses to protect customer, client, and staff information, with specific legal obligations varying for each business, necessitating guidance from Data and Privacy Experts
If you would like a consultation on business compliance standards, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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