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If you’re currently in Western Australia (or thinking of moving there) and want to launch your own business venture, there are a few things you will need to know.
From making a business plan to having the right legal agreements in place, it’s important to get all of this right so your business can be protected and secure from its early stages.
How To Start A Small Business In Western Australia
So, you’ve come up with an idea for a business and think it’s got a chance of working out – that’s great news!
One of the first things you should get in order is your business plan. This is putting together the research you have done to get up to this point and the other notes you will accumulate in one place.
Every business plan looks different, but they often contain information regarding market research, product or services descriptions, financing, marketing, future plans and goals. It’s important to make sure you’ve thought about essential aspects of running your business such as how you will finance it, the marketing, competitions and write down your plans to manage it.
In other words, your business plan should set out how your business journey will look moving forward with specific deadlines or required resources.
Business plans can help keep you on track and stay focused on your vision. If you’re disclosing your business plan to investors, you may wish to get a Business Plan Non-Disclosure Agreement.
How To Register A Business In Western Australia
Once you’ve secured the details and the plans for your business, you will need to move on to registering your business. All Australian businesses are registered with the Australian Securities and Investments Commission (ASIC).
This can be done online through the Business Registration Portal.
Businesses of all types and industries will need to start off by registering with ASIC. Your registration process may also depend on the business structure you choose (we’ll cover this in more detail later).
When registering your business, you will also have the option to apply for and relevant taxes, such as GST, PAYG or fringe benefits tax.
Once you have registered your business, you will receive an Australian Business Number (ABN). Your ABN is an 11 digit number that is used to legally identify your business. Every ABN is unique to each business.
If you’ve chosen a company structure, you’ll also need to have an Australian Company Number (ACN).
Business Name Registration In Western Australia
When registering your business, you will also have the option to register your business name (this can also be done separately if this suits you better).
Your business name is the name your business will trade and otherwise operate under. The general public is likely to identify your business through your business name. Pick a name that represents your business well and try to avoid names that will qualify as a restricted name by ASIC.
In order to see what names are currently available, you can visit the ASIC Business Name Search.
Protecting Your Business Name
A common mistake business owners often make is thinking a business name is theirs once it has been registered. The reality is that registering a business name is more of an administrative process. There is no legal protection offered to a business name that has been registered.
However, business names are part of a business’ identity and many business owners understandably seek legal methods to protect their business name.
You can protect your business name by getting it registered as a trade mark with IP Australia. If this is something you’re interested in, it’s better to plan ahead and pick a name that hasn’t already been registered as a trade mark.
The process for registering a trade mark can take up to 7 months – it’s good to get your business name protection sorted as early on as possible to make room for this timeframe.
Once you have successfully submitted an application (it’s wise to get a legal professional to help with this), the trade mark will be in opposition for two months. During this period, someone can come forward contesting the registration of your trade mark.
If no one comes forward or they do and IP Australia sides with you, then you will be the owner of that trade mark. The registration lasts for 10 years but you can have it renewed at the 10 year mark.
If you intend on registering your trade mark or the process is currently under way, you can use the ™ symbol to indicate the business name will be trade marked soon.
Business Structure
Your business structure will also impact your registration.
The most common types of structures business owners opt for are:
With some types of business structures, there are exceptions to getting your business name registered. These include:
- A sole trader or a partnership business structure do not need to register their business name if they are using their own names
- A company that already has a registered company name which is identical to their operating name
A company is its own legal entity. Therefore, once you register a company, you will have different requirements compared to other business structures. Some of these being:
- The company is a legal person. It can have bank accounts, legal proceedings, sign contracts, earn and lose money
- You are held to the obligations under the Corporations Act 2001
- It will need to have officeholders, such as directors and secretaries
- Shares will need to be allocated to relevant investors
Different business structures also have different types of liability. A company, for example, has limited liability. This means that any losses the company experiences will not extend to the directors of the company.
So, the owners’ assets will remain protected and they will not be personally liable. This is because of the separate legal entity doctrine which, as we stated above, allows the company to exist as its own person.
What Legal Documents Will I Need?
Being in business means constantly being exposed to risks and liabilities. Instead of just hoping for the best, it’s smarter to manage any potential hazards with the right legal documentation.
Being prepared and having the right legal documents can make all the difference when it comes to protecting your business.
Let’s take a look at some key legal documents you may need below.
Supply Agreement
Depending on the kind of business you plan on running, you might have a supplier deliver certain materials that are needed to keep your business running. For example, a cafe will need fresh produce or a tailor will require materials.
Often, businesses will have agreements with a certain supplier to provide them with the materials they need. It’s great to have arrangements with other businesses, but it is just as vital to have the right legal agreements in place to make sure everything goes well.
A Supply Agreement is a contract between your business and your supplier. It usually discusses:
- The materials being supplied
- When delivery is to happen
- How payment is to be made
- Warranties
- Liabilities
- Dispute resolution
- Termination of the contract
Often, businesses will have Supply Agreements with overseas suppliers. In this case, it’s wise to consult a lawyer to ensure your contract is internationally enforceable. Get in touch with our team today if you need help with your agreements.
Employment Agreement
When starting up a business, hiring staff is often required to successfully run your business. No matter the employment type or job, it’s extremely important to have an Employment Agreement with any employees you bring on board.
Not only does a formally written and signed agreement let everyone know what their duties and expectations are, but it can also be extremely useful to refer to if a dispute should ever arise.
Employment Agreements cover matters such as:
- Description of the role
- Pay
- Leave
- Hours and days off
- Entitlements
- Workplace policies
An Employment Agreement can be tailored to suit your specific needs – be sure to discuss this with our legal experts today for more information!
Non-Disclosure Agreement
Confidentiality is essential in business. Whether you are protecting a client, employee interests or trade secrets, you need to have the right agreements in place to maintain the privacy of your business.
A Non-Disclosure Agreement (NDA) can be used in instances where information needs to be revealed to a party that would otherwise not have access to it. Having the party sign an NDA can legally bind them to maintain confidentiality.
| Example A business owner hires a local artist to help design their new line of products. Among their legal agreements, they had the designer sign an NDA so they could not reveal anything about the new products prematurely. |
Protecting Your Intellectual Property
We discussed trademarking your business name earlier on in the article, however, trademarking is just one aspect of the broader intellectual property (IP) discussion.
As a business owner, your intellectual property is likely to expand beyond trademarking your business name. You might have materials that are subject to copyright, patents, designs and even trade secrets. All of these qualify things that can be protected by intellectual property laws.
Protecting your intellectual property is important as these contribute to your brand and your position in the market. So, it’s best to invest in your IP protection through the right registration processes and legal documents.
Designs and patents can be registered with IP Australia. Other forms of IP will likely need legal agreements in order to secure their protection.
For example, copyright applies automatically to any original work. However, most businesses go on to add a disclaimer to ensure people understand what is being copyrighted and the rights attached to it. . I
In addition to disclaimers, you may wish to have confidentiality clauses in your contracts to protect inside information. If you’re still unsure, feel free to chat to our expert Contract Lawyers at Sprintlaw who can answer your legal questions.
Starting An Online Business In Western Australia
An online business has additional legal documents that are needed to protect the business while it operates on the web. Being online opens your business up to more responsibilities, liabilities, risks and rules.
As a result, your legal documents need to accommodate the nature of online business activities.
Privacy Policy
The Australian Privacy Principles (APP) and the Privacy Act 1988 require businesses that collect the private information of individuals to have a Privacy Policy in place.
The rule has been updated from only requiring businesses that have an annual turnover of more than $3 million (this still applies) to anyone that collects any kind of private information.
Therefore, if you’re getting the emails, names, addresses, phone numbers, bank details and other types of personal information from customers, you are legally required to have a Privacy Policy in place.
A Privacy Policy lets customers know:
- What kind of information is being collected
- How the information is being gathered
- Where it is being stored
- Why it is being collected
- How the information can be accessed
- How the information will be used
- If it will be disclosed to anyone outside of Australia
- Instruction on filing a complaint if customer feel their information has inappropriately used
If you plan on expanding your business overseas, then it’s important to check the privacy regulations for those regions and ensure your privacy policy is compliant with them. For example, the EU’s privacy system is regulated by the General Data Protection Regulation (EU).
Website Terms and Conditions
Website Terms and Conditions are often used to set the rules for using your business’ website and limiting your liability should something unwarranted happen.
It’s essentially a legal document users must accept when they enter your website in order to continue using it.
Let’s say a user posts something inappropriate on the website. Well-written terms and conditions gives you the authority to delete anything and remove certain users.
T&Cs also allow you to limit your liability in case something goes wrong on your website.
Terms and conditions are extremely useful to lessen any risks and offer your business better protection in the online world.
Cookie Policy
A Cookie Policy is not something that is usually legally required. However, many businesses get one drafted in order to have better transparency with their users and build trust with their community.
Cookie Policies let users know their activities are being tracked and for what reasons.
In some regions or for certain activities, a Cookie Policy may actually be needed. In order to be on the safe side and ensure legal compliance, it’s best to talk to a legal professional!
Selling A Business In Western Australia
When it comes to selling a business, there are two main types of business sales you need to be aware of.
Asset sale and share sale.
An asset sale sells everything the business owns including intellectual property, physical property, equipment, materials, domains, client list and good will.
A share sale, on the other hand, is when the ownership of a company is sold by purchasing the shares. Therefore, everything else remains the same. However, there is a difference in who owns the company.
Both types of sales are relevant and legitimate ways to purchase or sell a business.
The sales, however, can get complex as they often involve a lot of factors. It’s always better to have the help of a legal professional when going through a sale so they can prepare, draft or review all the necessary legal documentation to ensure a smooth sale.
Do I Need A Licence To Run A Business In Western Australia?
Business licences really depend on the industry you are in and the kind of business you are running.
There’s no general licence for running a business you need to obtain, however, industry and locality will determine the kind of licence you will need, if any.
For example, if you plan on opening a cafe, you will need to follow food regulations and likely require permission from your local council before opening to the public.
If you plan on serving alcohol at your place of business, then you will need to obtain a liquor licence to do so.
You can search the Business Licence Finder to see what kind of licence applies to your business. We’ve also written more about what licence you may need for your business in Australia.
Key Takeaways
Starting a business is an exciting venture, even though there’s a lot to think about! If you have questions or need guidance, it’s best to talk things out with a legal professional to get the advice that’s right for you.
To summarise what we’ve discussed:
- Do you research and gather all your information into a business plan
- Find the right structure for your business and register it
- Registering your business name won’t grant your ownership of it. Look into trademarking for extra legal protection
- Get the right legal documents drafted for your business
- If your business is going to be online, make sure you have all the relevant online documents such as a Privacy Policy
- Selling a business usually involves either an asset sale or share sale
- Businesses licences depend on your business activities, industry and location
If you would like a consultation on starting a business in Western Australia, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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