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Finding a parking spot can feel like searching for buried treasure — you need to make the right moves, exercise patience, and seize the opportunity when it arises. With the growing number of vehicles on Australian roads, the demand for parking spaces has rocketed, creating a potentially golden opportunity in the parking industry.
In recent years, the parking industry has experienced remarkable growth and profitability, a trend that is showing no signs of slowing down. If you’ve been contemplating starting your own parking business, now might be the perfect time to turn that vision into reality.
Read on to discover everything you need to know about launching a successful parking lot business in Australia.
Is A Parking Lot Business Profitable?
Parking lots are often considered an attractive business venture due to their potential for steady profits with relatively low maintenance. While there is some truth to this, it’s a misconception to think that starting a parking lot business is as simple as painting lines on an empty lot.
To create a stable and profitable parking business, several key factors must be carefully addressed from the outset.
How To Start A Parking Lot Business In Australia
One of the primary key factors that need to be considered when starting your own parking lot business is choosing a business structure and registering your parking lot business. Picking the right structure for your parking lot business is critical, as it will have a significant impact on your business’s limitations, liabilities and legal rights.
In Australia, the three most frequently registered business structures are a sole trader, partnership and company.
Sole Trader
A sole trader business is typically when the owner of the business is the sole person operating and liable for the business. This can be great if you’re going into business by yourself, as it gives you complete control of your parking lot business. However, as a sole trader, you will also be completely liable for your entire parking lot business. This can be pretty risky — especially if something goes wrong.
Often, business owners consider setting up as a sole trader for the ease of registration. To register as a sole trader, you simply need to apply for an Australian Business Number (ABN) which can be done for free, via a quick online application process. If you’re going to be operating your business under a name that is different from your personal one, then you will also need to register a business name. After that, you’re all ready to start operating your parking lot business as a sole trader.
Remember, as a sole trader, there is no legal separation between you and your business. As such, whatever happens with your business might end up impacting you personally.
Partnership
A partnership business is where two or more people come together to own/operate a business. Partnerships can be useful when it comes to dividing the responsibilities of operating a business however, disputes can occur between partners (no matter how well you get along with them now). It’s a good idea to start a partnership off with a Partnership Agreement, that way all partners can be on the same page regarding important matters.
To register your business as a partnership, you will need to apply for an ABN for the partnership. Additionally, you will need to register a business name unless the business is operated under the personal names of all the partners.
Keep in mind that partnership businesses, much like sole trader businesses, cannot exist independently from its owners. Therefore, you and all the partners will be personally liable for everything that happens with the parking lot business.
Company
If you want to minimise the personal risk that comes with operating a business, then it’s a good idea to register your parking lot business as a company. A company is a legal entity on its own. That means, a company is able to exist separately from you with the ability to own property, sell property, earn a profit or incur debt.
Registering a company can be a bit complex – you need to ensure your registration is compliant with the Australian Securities and Investments Commissions (ASIC) requirements. ASIC is the main regulatory body for companies in Australia. Therefore, ASIC isn’t only important when registering your company — you’ll need to run your company in accordance with their regulations as well.
The setup process for a company is more time consuming and costly than the other business structures we mentioned – you’ll need to figure out the type of company you want to register, who your company shareholders and directors are as well as how your company will be governed. However, it’s often worth the work as a company provides much or more legal protection by giving you limited liability. So, if something happens with the company, it’s not necessary that you will be impacted personally.
Moreover, if you’re looking to expand your parking lot business in the future, sell it or even attach more business ventures to it, then a company structure is more suitable for these types of projects. A legal expert will be able to help set up your company with your goals in mind. That way, structurally, your parking lot company will be ready for whatever long-term plans you may have for it.
Are There Any Legal Obligations For Starting A Parking Lot Business?
You might be wondering, what kind of legal obligations impact a simple parking lot business?
The answer is, quite a few. You don’t need to run a large, complex organisation in order to be impacted by laws – every business, no matter their industry and size, has legal regulations it needs to abide by.
Your parking lot business is no different. To protect your business and ensure it’s legally compliant, you need to be prepared to follow certain rules, attain licences where needed, get good legal documents drafted and consistently stay up to date with any relevant regulations that might impact your business.
The exact laws you need to look out for will depend on your individual business, so it’s a good idea to chat with a legal expert. For now, we’ve lasted a few regulations that are likely to effect your parking lot business.
Local And State Laws
To operate a privately owned parking lot that is available to the public, you will need to abide by any local and state regulations. This means, ensuring you’ve taken a look at zoning laws and gotten the right developmental approvals to build your parking lot. State regulations will likely require you to get an approval to operate a car park – it’s important to have all this in together before starting your car park business. Additional regulations you may need to pay attention to include signage and advertising rules, traffic management as well as environmental regulations – chatting with a legal expert can help you get a better idea of your parking lot business’s legal obligations.
Employment Law
There’s a good chance you may need to hire employees to help maintain or manage the day-to-day operations of your car park. When hiring employees, it’s important to have a positive and professional relationship with them, starting by following your legal responsibilities in the Fair Work Act. The legislation covers matters such as pay, leave, redundancy, termination, breaks and more – it’s a good idea to become familiar with it. Having an Employment Agreement that covers the rights and responsibilities of both you and your employees is a good way to ensure both parties are on the same wavelength. Employees will also need to be trained – having legal documents such as a Workplace Policy or a Staff Handbook is useful in ensuring you are clearly communicating all important matters to your employees.
Australian Consumer Law
Australian Consumer Law (ACL) protects consumers and businesses by promoting fair trading practices. If you’re planning to charge for parking, it’s crucial to comply with ACL regulations, which set standards for providing goods, maintaining quality, and ensuring fair business practices. Failure to comply can lead to penalties and legal consequences, so understanding and adhering to your obligations under the ACL is essential.
Data And Privacy Laws
When you collect customer data, it’s your legal duty to ensure their information is handled correctly. If your parking lot business is going to be utilising security cameras or collecting customer information through parking payment/management systems, then you’ll need to make sure your conduct is compliant with the Privacy Act.
Are There Any Other Legal Agreements I Will Need For My Parking Lot Business?
We noted a couple of legal agreements (see above) that can protect your parking lot business and help it stay compliant with the law. Naturally, the exact legal agreements you will need depend on the specific operations of your business, so it’s always a good idea to chat with a legal expert to get advice that is catered to your individual parking lot business.
For a little extra guidance, we’ve listed a few more legal agreements you may want to think about here:
Whether it’s protecting your business’s privacy, making sure your business is keeping up with its privacy obligations or setting up your parking lot company the right way – strong legal agreements, catered to meet the needs of your business can go a long way!
Key Takeaways
Starting a parking lot business can be a clever, profitable business venture. However, it’s important to take care of the legal aspects – that way can give your business the right foundations for success from the start. To summarise what we’ve discussed:
- The parking industry in Australia is growing, making it a potentially profitable business venture
- Starting a parking lot business requires careful planning, including choosing the right business structure, such as sole trader, partnership, or company
- Legal obligations, including zoning laws, developmental approvals, and compliance with local and state regulations, must be addressed before starting the business
- Employment laws, including the Fair Work Act, apply if you hire employees, and proper agreements like Employment Contracts and Workplace Policies are essential
- Compliance with Australian Consumer Law (ACL) is necessary when charging for parking services to ensure fair trading practices
- Data and privacy laws, particularly the Privacy Act, must be followed if collecting customer information or using security cameras
- Legal agreements such as Business Terms and Conditions, Privacy Policies, and NDAs are crucial for protecting the business and ensuring compliance
If you would like a consultation on starting a parking lot business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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