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Starting a food company is different from starting any other type of business. Food regulations are stricter, and industry standards are higher compared to other sectors.
Since people will be directly consuming the food you sell, their health and safety are in your hands. Carelessness or negligence could cause serious harm, making it essential to take food business regulations seriously.
Starting a food company isn’t something to take lightly — ensuring you meet the correct regulations and set up your business properly is imperative. Keep reading to learn more.
How Do I Start A Food Company?
Starting a food company is serious business (no pun intended), and taking shortcuts can land you in serious trouble. However, that doesn’t mean starting a food company has to be complicated or overwhelming. You just need to understand the necessary steps, execute them correctly, and seek expert guidance where needed.
Let’s take a closer look at what you need to do to start a food business.
Business Plan
Creating a business plan is an integral part of starting your food business. Staying organised is a crucial skill for every business owner, regardless of industry.
A business plan is the foundation of your business — the key proposal — even if it’s for your eyes only. It’s important to clearly establish key aspects such as:
- Financial plans
- Product details
- Legal obligations
- Company objectives
- Internal operations
- Brand identity
Remember, a business plan shouldn’t be overly rigid, but it should be comprehensive enough to keep you on track when you officially launch your food business. Without clear direction, it’s easy to stray from your goals.
Company Registration
Officially registering your venture as a company is a critical step in forming a successful venture, as this process lays the legal foundation for your food company.
In Australia, all companies are registered and regulated by the Australian Securities and Investments Commission (ASIC). ASIC is the primary government body responsible for company audits, fees, and changes to company details. Understanding ASIC’s regulations and ensuring compliance is one of your key responsibilities as a business owner.
To register your company with ASIC, you’ll need to decide on the type of company structure that best suits your business. There isn’t just one kind of company — options include dual-company structures and other corporate forms. Choosing the right structure for your business model and growth goals is essential. You’ll also need to define your company’s governance, including appointing directors and other officeholders. Once you have this information, you can file and submit an application to register your company.
However, registering your company with ASIC is just one part of the process. Other key steps include:
- Registering for an Australian Business Number (ABN)
- Registering a business name (if different from your company name)
- Opening a company bank account
It’s a smart idea to seek legal guidance during this process. A legal expert can ensure all requirements are met, helping your company establish a strong legal foundation.
For a detailed guide on starting a company, check out our article: Steps To Incorporate Your Small Business In Australia.
Licences
To legally start and operate a food business, you must obtain the correct licences and permits. The specific licences required will depend on your business activities — for example, a food processor, manufacturer, or wholesaler will have different licensing requirements.
Because licensing requirements vary, it’s always advisable to seek expert legal advice. A legal professional familiar with food industry regulations can help ensure you have all the necessary licences and permits to operate legally.
Key Licences & Permits for Food Businesses:
- Food Authority Licences: Issued by state or territory food authorities, these licences regulate businesses involved in food manufacturing, handling, and processing.
- Local Council Permits: Each local council has its own registration and permit requirements for food businesses. Depending on your operations, you may need:
- Food business registration
- Trade waste permits (if disposing of food waste into the sewer system)
- Outdoor dining permits (for cafés, restaurants, or mobile food vendors)
- Alcohol Licences: Required only if your business sells alcohol, including restaurants, bars, and catering services. These are issued by state liquor licensing authorities.
- Mobile Food Vendor Permits: Required if operating food trucks, market stalls, or mobile catering businesses. These permits are issued by local councils and may include:
- Temporary event permits for market stalls or food festivals
- Vehicle registration and inspection permits for food trucks
- Street trading permits if selling food in public spaces
- Export Licences: If your business exports food products, you may need an export licence from the Department of Agriculture, Fisheries and Forestry (DAFF).
What Rules & Regulations Does My Food Company Need To Follow?
Legal compliance is an essential part of starting a food company. Ensuring your company follows the relevant rules and regulations will not only help keep customers safe when consuming your food products, but it will also protect your business from liability and help build a trustworthy reputation in the community. Additionally, maintaining strong legal compliance helps you avoid fines, legal investigations, and even court proceedings due to non-compliance.
Here’s a few regulations you may want to keep an eye out for.
Food Safety Rules
Food safety rules determine how food must be handled, produced, stored, and cooked. These standards are typically backed by research to ensure that when food is handled according to these guidelines, it remains safe for consumers to purchase.
Food business regulations generally vary by state; however, there is one federal guideline that applies nationwide. The Australia New Zealand Food Standards Code (FSANZ) applies to all businesses handling food in Australia.
For other regulations, you’ll need to check with your state authority. For instance, food businesses in NSW must comply with the Food Act 2003 and Food Regulation 2015.
Consulting with a legal expert can save you time and effort (not to mention the headache of reading legislation), and they can guide you on the best ways to stay legally compliant.
Australian Consumer Law (ACL)
The Australian Consumer Law (ACL) is another important piece of legislation you’ll need to familiarise yourself with when starting a food company. The ACL protects consumer rights and sets standards for fair market practices, covering matters such as false advertising, pricing, refunds, and returns.
However, it also includes rules regarding product quality and packaging requirements. As a food company, if you’re packaging food, you must comply with food labelling laws. Additionally, your company will need to have policies in place that align with fair consumer practices, such as a clear refund policy.
Employment Law
When you decide to hire employees for your food company, you must comply with Australian employment regulations and workplace health and safety laws. This means ensuring they receive the correct entitlements and providing a safe working environment for all employees.
As an employer, your responsibilities may include keeping accurate records, training employees in safety procedures, and maintaining compliance with workplace laws. While your duties may vary, staying on top of your employer obligations is essential to running a legally compliant business.
Data & Privacy Law
Food won’t be the only thing you’ll be handling — your company will also collect and store information about customers, employees, and business partners. It’s important to take reasonable steps to protect this information and understand your legal obligations, such as notifying the appropriate authorities and affected parties in the event of a data breach.
Intellectual Property (IP) Law
If you’re thinking of creating a unique logo, catchphrase, or business name, you may want to protect your intellectual property (IP) by registering it as a trademark. Too many Australian businesses face costly legal disputes because they didn’t secure their trademark rights — make sure this isn’t you.
Other forms of IP, such as recipes, should also be protected through legal measures, such as copyright protection or confidentiality agreements. Be sure to consult a legal expert to understand the best options for safeguarding your business assets.
Do I Need Any Legal Agreements To Start A Food Company?
Of course! Several legal agreements are essential when starting a food company. Skipping this step can expose your business to significant risks — for example, not having a formal agreement with your supplier could leave your business stranded in a time of need.
Some legal documents, such as a privacy policy and employment agreement, are legally required if your business collects personal information through a website or hires employees.
To determine which legal agreements your business needs, it’s always best to consult a legal expert. Not only can they identify the most relevant agreements for your business, but they can also draft them to meet your company’s specific needs.
Here are a few key legal agreements to consider:
- Supply Agreement
- Employment Agreement
- Privacy Policy
- Shareholders Agreement
- Non-Disclosure Agreement (NDA)
- Website Terms & Conditions
- Workplace Policy
Key Takeaways
If you’re thinking about starting a food company, it’s important to understand your legal obligations to ensure your business is set up and operated correctly.
To summarise what we’ve discussed:
- Starting a food company requires compliance with strict food safety regulations, business registration, and industry standards to ensure consumer health and safety.
- A solid business plan is essential for setting financial, operational, and branding goals, helping you stay focused as your business grows.
- Registering your company with ASIC and obtaining an ABN, business name, and bank account are key legal steps in establishing your food business.
- Licences and permits vary by business type but commonly include Food Authority Licences, local council permits, alcohol licences, and export licences.
- Key regulations to comply with include food safety laws (FSANZ), Australian Consumer Law (ACL), employment laws, and data privacy laws.
- Protecting intellectual property (IP) through trademarks, copyright, or confidentiality agreements helps safeguard your brand and unique business assets.
- Legal agreements such as supply agreements, employment contracts, privacy policies, and NDAs are crucial for risk management and compliance.
If you would like a consultation on starting a food company, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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