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Thinking of starting a bath bomb business?
Bath bombs are the ultimate self-care product. Getting the right shapes, scents, and colours is all part of the magic. If you’ve been perfecting your formula, starting a bath bomb business could be your next move.
Here’s the thing, alongside the creative side of your bath bomb business, there’s also a legal side that you’ll need to get right. This includes properly registering your business, staying compliant with relevant regulations, and making sure your products (and brand) are legally protected.
We know – you just wanted to make and sell bath bombs. No worries, that’s where we come in. Keep reading to learn more.
Starting A Bath Bomb Business: Business Structure & Registration
You can’t start your bath bomb business without legally registering your business first. To do this, you will first need to pick out the right business structure and then follow the relevant requirements to register your business under that structure. In Australia, the most popularly registered business structures are a sole trader, partnership and a company – let’s take a closer look at each one.
Sole Trader
If you want to be the sole owner and operator of your bath bomb business, registering as a sole trader might be the simplest option. The setup process is straightforward – you just need to apply for an ABN and register a business name if you’re trading under a name different from your own.
While becoming a sole trader is quick and cost-effective, there are some important limitations to consider. This structure doesn’t support external investors or many expansion opportunities, and it doesn’t separate your personal and business liabilities. That means you’ll be personally responsible for any debts or legal issues that arise.
Partnership
A partnership can be a great way to divide responsibilities and leverage each partner’s strengths. Like a sole trader, setting up a partnership is relatively simple – you’ll need to apply for an ABN and register a business name.
However, partnerships share many of the same limitations as sole trader structures. Liability is shared equally between all partners, which can be risky if something goes wrong. That’s why having a strong and clear Partnership Agreement is crucial – it outlines roles, responsibilities, and how disputes will be handled.
Company
Many people assume that company structures are only for large businesses – but that’s not the case. Even if you’re just starting out or plan to stay small, you can register a company as a sole director and shareholder.
The main advantage of a company is that it offers limited liability, which means your personal assets are more protected. It’s also better suited for growth – for example, if you want to attract investors or expand into franchising.
That said, companies are more regulated. You’ll need to identify officeholders, follow ASIC requirements, and have the right legal documents in place. Because of this added complexity, it’s a good idea to get support from a legal expert to ensure everything is set up properly from the start.
What Legal Requirements Does My Bath Bomb Business Need to Meet?
Legal compliance is an essential part of starting and running any type of business. When starting your bath bomb business, it’s important to do your due diligence and determine exactly which laws apply to your business.
It can be confusing to figure this out on your own, so speaking with a legal expert and getting advice tailored specifically to your bath bomb business is a smart move.
In the meantime, we’ve listed some key areas of legal compliance you may want to keep in mind.
Australian Consumer Law (ACL)
To stay compliant with the ACL, you’ll need to meet product safety guarantees, ensure transparency in your marketing practices, and implement consumer-friendly policies – such as fair refunds and warranties. The ACL covers a broad range of requirements, so it’s important to take the time to understand your obligations. If you’re unsure, don’t hesitate to reach out to a legal expert for tailored advice.
Cosmetics Product Regulations
Bath bombs are generally considered cosmetic products in Australia, which means they are not regulated by the Therapeutic Goods Administration (TGA) unless you make therapeutic claims (such as relieving pain or treating skin conditions). However, you will likely need to comply with the Australian Industrial Chemicals Introduction Scheme (AICIS) under the Industrial Chemicals Act 2019.
AICIS regulates the use, importation, and handling of industrial chemicals commonly found in bath bombs, such as fragrances, colourants, and other cosmetic ingredients. If you’re manufacturing or importing these ingredients, you may need to register your business with AICIS and ensure your ingredients are permitted and reported where required. These regulations are designed to ensure public safety and proper chemical handling in consumer products.
Import/Export Laws
If you’re importing ingredients for your bath bomb business from overseas or planning to ship your products internationally, it’s important to understand Australia’s import and export regulations. You’ll need to ensure that any ingredients or materials comply with safety standards set by regulators like the Australian Border Force (ABF) and AICIS (if chemicals are involved). It’s also essential to know which substances are restricted or prohibited, and to complete all required customs declarations accurately. Understanding these rules helps you avoid border delays, fines, or penalties – and ensures your business operates smoothly and legally.
Employment Law
When you hire employees to work in your business, you’ll need to make sure you meet your obligations as an employer. This includes complying with Fair Work laws, paying at least the minimum wage, and ensuring you meet all workplace health and safety requirements. These responsibilities are an essential part of employing staff, so it’s important to familiarise yourself with the relevant laws and integrate them into your business practices.
Licences And Permits
Depending on where you operate, you may need local council permits, zoning approvals, or health and safety inspections. It’s important to research your local and state obligations before starting your business – the last thing you want is to face fines or be forced to shut down because you’re not in line with the regulations.
Intellectual Property (IP) Law
Your brand is one of your most valuable assets. From your business name and logo to your product packaging and scent combinations, these elements may be protected under intellectual property law. Registering a Trade Mark for your name, logo, or slogan helps you gain legal ownership and prevent others from using similar branding. You may also want to consider copyright protections for original designs or written content and Non-Disclosure Agreements (NDAs) to protect trade secrets when working with suppliers or contractors.
Data & Privacy Law
If you collect customer information online, you’ll need to comply with the Privacy Act 1988 and the Australian Privacy Principles (APPs). This typically means having appropriate privacy protections in place, obtaining the right consents, and maintaining key legal documents, such as a Privacy Policy, to ensure you’re handling and protecting customer data properly.
Will I Need Any Legal Documents To Start A Bath Bomb Business?
Yes, legal documents are an essential part of starting and running a business. Some documents, like a Privacy Policy or an Employment Contract, may be legally required. Others might not be mandatory, but they play a crucial role in protecting your bath bomb business and setting you up for long-term success.
A legal expert can help you identify the specific agreements that are most relevant to your business and tailor them to suit your needs.
Here are a few legal agreements you may want to consider:
- Supply Agreement
- Distribution Agreement
- Staff Handbook
- Workplace Policies
- Website Terms & Conditions
- Non-Disclosure Agreements (NDAs)
Key Takeaways
There’s a significant legal side to starting a bath bomb business – but with the right legal support, the process can be much more manageable. Here’s a quick summary of what we covered:
- You’ll need to choose the right business structure (sole trader, partnership, or company) and register your bath bomb business before you start trading.
- Compliance with Australian Consumer Law is essential, including meeting product safety guarantees and offering fair refund and warranty policies.
- Bath bombs are generally classified as cosmetic products and must comply with AICIS chemical regulations (unless therapeutic claims are made, in which case TGA may apply).
- If you’re importing ingredients or exporting products, you must follow Australian import/export rules, including proper customs declarations.
- Employment, workplace safety, and local permits or council approvals are required if you hire staff or operate a physical business location.
- Protecting your brand with trade marks, copyright, and NDAs is important for securing your intellectual property.
- Key legal documents like privacy policies, employment contracts, supply agreements, and website terms & conditions help keep your business legally protected and running smoothly.
If you would like a consultation on starting a bath bomb business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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