Technology has revolutionised a vast number of industries and more broadly, the entire business landscape. The marriage of business and tech has led to the emergence of more ‘tech companies’, further driving innovation in the market. So, if you’ve been considering starting your own tech company, you could be on a promising path. 

However, starting a tech company is about more than technology. To start your own tech company, protecting your company and making sure it’s legally compliant is going to be one of the main factors in securing its success. It’s best to get a little help when it comes to the legal side of starting a tech company – that’s where we come in.

What Is A Tech Company?

‘Tech’ (short for technology) is a pretty wide-ranging term but in this case, vague terminology works as tech itself is a pretty big industry. The tech industry encompasses a huge range of products and services. Generally, a tech company is an organisation that manufactures, produces, sells or provides services that are technology based. 

What Is The Difference Between A Tech Startup And A Tech Company? 

Both tech companies and tech startups focus on tech services and products. The key difference lies in their business structure and approach. Startups are generally focused on scalability, rapid growth, and often involve high risk and high rewards. In contrast, small tech companies typically have a more stable and steady approach to business, with proven business models and sustainable operations.

There’s no right or wrong option when it comes to deciding between starting a tech startup or a tech company. Rather, it’s better to look at your unique situation, what options are available to you, the vision you have for your business and go from there. 

Many business owners draw up a business plan so they can have a clear map of where they’re headed. During this stage, you might want to chat with a legal expert, so they can provide you with some additional information and expert guidance. 

How Do I Start My Own Tech Company? 

A tech company (or startup) begins just like any other company – by registering it with the Australian Securities and Investments Commission (ASIC). You can register your company online by filling out the correct forms. However, there’s a few things you’ll need to do first. 

  1. Do Your Research 

Before setting up a company, it’s important to know what running a company is going to entail. ASIC is the main regulatory body for companies in Australia and when you have a company, you will need to adhere to  a number of ongoing obligations with ASIC. This means, reporting to them when necessary, paying any required fees, conducting necessary audits etc. Understanding your legal duties with ASIC as a company owner is integral before you start your tech company. 

  1. Pick Out A Business Name

Before you register your company, it’s good to have a business name picked out that you’re confident isn’t being used anywhere else. Even though you will have a company name, you might want trade by your business name instead – something many business owners prefer to do. In order to have a business name, you will need to register it. 

If you’re interested in ownership of your business name, then consider taking it a step further and seeing if the name is available to be trade marked. If it is, talk to a legal expert about getting your business name registered as a trade mark as soon as possible because the process can be lengthy. 

  1. Decide Company Details 

Another important task to complete before registering your company is deciding on company details. The application form is going to ask you a number of questions and it’s best to be well prepared for them. Before registering your tech company, determine matters such as how your company will be governed as well as who the directors and shareholders of your company will be. You’re also required to know administrative details like your company address, bank details, and contact information. 

Registering a company involves a lot of forethought and planning before you even get to the application form. Having a legal expert help out with this process can make it much easier, plus they can help ensure everything gets set up the right way. 

If you would like to know more about the process to register a company, we’ve written about it in more detail in our article, Steps To Incorporate Your Small Business

Do I Need Any Legal Documents To Start A Tech Company?

Yes, you will need legal documents to start a tech company. Once you’ve gone through the effort to properly plan and register your company, naturally the next step is to nsure your company is well protected. That’s where strong, professionally drafted legal agreements come into play. 

The exact legal agreements you will be needing are going to depend heavily on your tech company’s specific business operations – getting expert advice is highly recommended. In the meantime, we’ve listed a number of legal documents that are likely going to be useful for you below. 

Service Agreement:  If you’re going to be offering a service to clients, then it’s important to have an agreement that will highlight the scope of work plus other important details 

IP Licence: Monetising your IP is great however, it’s important to make sure you’ve secured your legal ownership through the correct licences when doing so. 

Non-Disclosure Agreement: When you have a tech company, there’s naturally going to be matters you want to keep private and secure. An NDA is a clever way to legally protect private business information. 

Privacy Policy: The privacy of your customers is also essential. A website privacy policy is required if your tech company’s website is going to be collecting information from its users (or has an annual turnover of more than $3 million). 

Employment Agreement: When you hire staff, it’s important to communicate your expectations as well as their rights in clear and concise employment agreements. 

Distribution Agreement: When you put a product out there, then you will likely have a distributor. It’s important that your company and the distributor are on the same page through a distribution agreement. That way, if there’s ever a misunderstanding you can always look back on the contract to solve the matter. 

What Laws Will Affect My Tech Company? 

Like any other business, your tech company will need to follow the relevant rules and regulations. These regulations can come from local laws or federal legislation – each one is equally as important. 

Much of your tech company’s legal compliance obligations will depend on factors that are unique to it such as industry, size and location. Industry specific regulations, such as keeping an eye out for banned materials or products should be obeyed. Local council laws, such as seeking the correct registrations and permits for your tech business are necessary for compliance to. Other regulations you will likely need to keep an eye out for include:

  • Australian Consumer Law
  • Data and privacy law
  • Intellectual property law
  • Employment law 

We get it – there’s a lot of regulations to consider! Being aware of laws is one thing however, you will also need to actively ensure legal compliance. It can be hard to know the best way to approach legal compliance – that’s where a legal expert comes in handy. 

Next Steps 

When starting a tech company, legal considerations are necessary for protection and compliance. To summarise what we’ve discussed: 

  • Starting a tech company involves more than technology; legal protection and compliance are crucial for success
  • To start a tech company in Australia, you must register with ASIC and understand ongoing legal obligations 
  • Choose a unique business name, decide on company details (governance, directors, shareholders), and consider trademarking the name 
  • Essential legal documents include service agreements, IP licences, NDAs, privacy policies, employment agreements, and distribution agreements 
  • Compliance with various laws (consumer, data privacy, intellectual property, employment) is necessary, and legal expertise is beneficial for navigating these requirements 

If you would like a consultation on starting a tech company, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

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