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As supplements continue to increase in demand, the entrepreneur in you might be itching to start your own supplement company. Starting a supplement company can be a great way to provide a valuable product to customers, however, it’s important to consider the legal aspects of starting a supplement company.
No matter how great your product is, the success of your supplement company can’t depend on the product alone. Many factors determine whether a company will be successful or not. Legal considerations are one of these major determining factors. When your supplement company comes across a challenge, the legal security of your company can help it push through.
So, before you start mixing ingredients – take a look at the legal factors you need to consider to set your supplement company up for success.
Is Starting A Supplement Company A Good Idea?
There’s no yes or no answer to whether starting a supplement company is a good idea. This will depend on your individual circumstances. If you are unsure about setting up your supplement company, then take the time to properly do your research and planning. Documenting things in a business plan can help you gain better clarity and determine whether this is the right step for you. A few things you could include in your business plan are:
- Executive summary
- Long term and short term goals
- Financial plans
- Legal considerations
- Competitor research
- Marketing ideas
- Intellectual property
Having a business plan can have multiple benefits. If you don’t end up setting up your supplement company at this point in time, then at least you have your research and idea down in one place for when you do opt to start your company.
If you decide to proceed with setting up your supplement company, then having a business plan is a great way to stay on track and explain your business to others, such as a legal professional or a potential investor (make sure you have them sign an NDA though).
Start Your Own Supplement Company In Australia
To start your supplement company in Australia, you will need to go through the Australian Securities and Investments Commission (ASIC). ASIC is the primary regulatory body for all companies in Australia. Not only will you need to register your company with ASIC, any changes to your company, plus all ongoing obligations need to be reported to ASIC. Getting familiar with them is a good idea.
Before you start the actual company application process with ASIC, you’ll need to determine a few things. Sorting out your directors, shareholders and company governance is high on that list. You will also need to figure out things like the type of structure your company will have and the name it will go by.
The registration process for Setting Up A Company can be a bit complex and time consuming. However, if your supplement company is a serious business endeavour then it’s the most recommended option. When your company is properly set up, it will function as a legal entity on its own. This means the company will be able to own property, earn a profit and work up a debt, all while having legal separation from you personally. Getting guidance from a legal expert can make sure starting up your supplement company goes off without a hitch.
In our article, Steps To Incorporating Your Small Business In Australia, we cover the process of starting a company in more detail.
What Are The Legal Considerations For Starting A Supplement Company?
Legal compliance is essential for any company. Regulations will determine what your supplement company can and cannot do, so it’s important to have a good understanding of the laws that impact your company. Your company’s exact operations determine the laws that affect it, so getting in touch with a Regulatory Compliance expert for advice that’s catered to you is wise.
We’ve also listed a few general legal compliance measures that can impact your supplement company, read below to learn more about them.
Australian Consumer Law
As you’ll be selling a supplement, following Australian Consumer Law (ACL) regulations is of crucial importance. The ACL determines things like labelling requirements, advertising laws and fair trading practices. A few things you’ll need to think about when factoring in the ACL’s standards are:
- Whether or not the label on your products meets the relevant legal standard
- If advertisements for the supplement have the potential to mislead or deceive consumers
- Have fair trading practices been met with the product?
- Are the consumer guarantees, warranty and returns policy for the supplement in line with the ACL’s rules?
These are just a few of the legal considerations you’ll have before getting your supplement out into the market. Moreover, as the owner of a supplement company you will also need to see whether your product meets other consumer legal standards. For example, there may be industry specific rules, manufacturing practices and Therapeutic Goods Administration (TGA) approvals you need to attain.
Finding out which ones apply to your supplement company and taking the steps to adhere to each requirement should be one of the main priorities when setting up your supplement company. Not doing so can lead to serious consequences – ranging from legal penalties to harming your consumers. As such, you want to take this part of setting up your supplement company very seriously – get in touch with a legal expert for professional guidance today.
Employment Law
As your supplement company grows, there’s a good chance your team will too. This is always exciting for a company owner however, it does come with a few added responsibilities. As an employer, you will need to ensure your staff are being treated according to national standards. This means, making sure they have the correct awards and entitlements, as well as creating a safe workplace environment for them to thrive in.
There’s a few legal instruments you can use to help you fulfil your employer obligations. Clearly setting out what you owe your staff as well as the expectations and responsibilities of both parties in an Employment Contract is always a good way to avoid misunderstandings. A well drafted Workplace Policy and Staff Handbooks are also extremely useful for setting boundaries and determining professional conduct in the workplace. You can chat with one of our Employment Law experts for more information on fluffing your legal duties as an employer.
Data and Privacy Regulations
Another legal consideration for your supplement company is data and privacy regulations. When you have customers or staff, you’ll likely have information on them that will need to be kept private. Implementing the right legal instruments to safeguard all the private information your business has collected is part of your duty to protect information as a company.
Moreover, you might have a company website, where potential customers can read more about your brand and purchase your products. In this case, there’s a strong chance you’ll be required to have a Privacy Policy on your website. The Privacy Act and Australian Privacy Principles require a website that collects any kind of personal information to have a Privacy Policy visible on its website. Chatting with a legal expert in Data and Privacy can help you gain a better understanding of the legal compliance measures you need to undertake as a supplement company.
Do I Need Any Other Legal Documents For My Supplement Company?
Aside from fulfilling legal compliance measures, you will likely need other legal documents that help protect your business and minimise any potential risks. The right legal agreements can help protect your liabilities, secure your revenue streams and prevent disputes, so they are a worthwhile investment. A few legal agreements to consider include:
Talking to one of our legal experts today to find out which legal documents your supplement company will need.
Next Steps
Starting a supplement company can be an awesome new business venture, however it’s necessary to factor in the legal considerations when setting up your supplement company. To summarise what we’ve discussed:
- Legal considerations are crucial when starting a supplement company, as they can determine the success and resilience of the business
- Conduct thorough research and planning before deciding to start your supplement company; a well-documented business plan can provide clarity on your goals and strategies
- In Australia, register your company with the Australian Securities and Investments Commission (ASIC) and understand ongoing obligations and reporting requirements
- Adhere to Australian Consumer Law (ACL) regulations. Considering labelling, advertising, fair trading practices and consumer guarantees for your supplements
- Employment law becomes important as your supplement company grows; ensure compliance with national standards, create employment contracts and establish workplace policies
- Data and privacy regulations are crucial; protect customer and staff information and consider having a Privacy Policy on your website
- Besides legal compliance, consider other legal documents such as supply agreements, disclaimers, website terms and conditions and cookie policies to protect your business and minimise risks
If you would like a consultation on starting a supplement company, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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