Starting A Business In South Australia

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Starting a business is always a momentous and exciting new chapter. The early stages are one of the most important. This is where you will lay the foundations for your business – it can either make or break it.

There’s no need to stress though! We’ve prepared a guide that walks you through some of the key things you need to know when starting a business in South Australia.

How To Start A Business In South Australia

The first thing you need to do when gearing up to launch a new business venture is to perfect your idea! Whether you plan on selling a good or service, test it out to make sure it’s ready to be released into the public.

It’s a good idea to take detailed notes and place it all into a business plan along with your other research. Ultimately, you need to be making considerations for factors such as:

Market competition
Target audience
Advertising
Financing
Business goals
Legal compliance
Business management

Planning all this out beforehand can help you stay focused on your goals and prepared for any situation that comes your way. Generally, a business plan should set out how your business will do things moving forward, with specific details and deadlines to keep you on the right track.

Which Business Structure Should I Choose?

The business structure you choose will depend on a number of factors such as your long term goals, resources, industry, location, business size and operations. Common business structures include:

Sole trader: This is where the business owner is the sole person in charge of the business. A sole trader has unlimited liability.
Partnership: Two or more people own the business together, and share unlimited liability.
Company: The business is a legal entity on its own and has the same rights as a legal person, thereby being protected by limited liability.
Trusts: The business is held by a trustee

Each structure has its own benefits and limitations. For example, a sole trader owns their business entirely. However, they are completely and personally liable for their business.

A company structure, on the other hand, is a legal entity. Therefore, owners are only responsible to the extent of what they have invested into the company and not beyond.

Take the time to weigh the pros and cons before coming to a decision. It can also be useful to have the advice of a legal professional – reach out to our lawyers if you need to talk!

How To Register A Business In South Australia

In order for your business to be legally recognised, you will need to register your business. The process of registering your business also gives you the option to apply for taxes. It’s good to know which ones will be relevant to your business before you get started, as they can differ depending on your business structure.

All Australian businesses are registered with the Australian Securities and Investments Commission (ASIC) and can be done online through the Business Registration Portal.

Upon registering your business, you will receive an Australian Business Number (ABN). The ABN is an 11 digit number that is used to legally identify your business and is necessary for legal purposes, such as paying business taxes.

If you are registering a company, then you will need to take the additional step of applying for an Australian Company Number (ACN) as well. Your ACN is also pretty important, it’s used when lodging documents with ASIC, making business orders, notices, letterheads and more.

Do I Need To Register My Business Name In South Australia?

Most businesses need to register their business name unless they meet one of the exceptions.

The rules for registering a business name are the same all across Australia. Your business name can be registered at the same time you register your business for an ABN with ASIC.

The only time you do not need to worry about registering your business name is if:

You are a sole trader using your own name
Your business is a partnership and the names of all the partners are being used as the business name
You are a company with a registered company name that is identical to the business name

Registering a business name does not mean you own it. If you want to legally own your business name, you’ll need to register it as a trademark.

We’ll explore this in more depth when we talk about intellectual property later on!

What Legal Documents Should I Have?

Legal documents are what keeps your business compliant and protected from risks. It’s important to ensure you are following the correct legal regulations and safeguarding your business from potential disputes that could really disrupt your businesses growth.

Having the right legal documentation can aid with avoiding unwanted discrepancies to your business activities.

We’ve made a list of some important legal documents new business wonders commonly come to us for.

Employment Agreements

When hiring employees, it’s essential to have a written agreement in place. You and your employee need to be on the same page regarding your duties and responsibilities towards one another.

If there is ever a misunderstanding, the Employment Contract can always be referred to.

Employment Agreements can be catered to you business, they often cover:

Title of the role and description of the job
Type of employment
Hours and days to be worked
Business policies
Pay, leave, awards and entitlements
Intellectual property ownership
Disclaimers
Termination
Dispute resolution

Contractor Agreement

A Contractor Agreement is used for staff that are being hired externally. Contractors are often utilised on a temporary basis for the completion of a project. Their employment with the business usually ends after a certain period of time or when a specific task has been completed.

Having an agreement with contractors is especially important. Even though the terms of their employment are very different to employees that are employed within the business, they can often look a lot like an internal employee of the company as opposed to a contractor.

Many employers engage in ‘sham contracting’, where they treat employees like contractors so they don’t need to fulfil certain obligations like paying them minimum wage.

As a result, your agreements with contractors need to clearly specify the terms of their employment so you don’t end up owing them the same obligations as employees. We’ve written more about what the law says about the difference between employees and contractors.

Shareholders Agreement

If you’re starting a company, then you are likely going to have shareholders. For a company that is going to have more than one shareholder, it’s important to have a Shareholders Agreement between the investors.

Shareholders play an integral role in making decisions regarding the company. They can influence the direction of a company entirely, which is why it’s extremely important they have a document that can govern their conduct and set out what is expected of them.

Shareholders Agreements cover:

Voting
Share transfer
Shareholder meetings
Decision making
Share portions
Shareholder and director relationship

Companies should also have a Company Constitution (as required by the Corporations Act 2001). A Company Constitution will usually set out the rules for how the company will run, such as how meetings will be held and what directors can and can’t do.

Internationally Enforceable Contracts

If you plan on expanding your business outside of South Australia to international locations, your legal agreements will need to have clauses that cater to this.

Internationally enforceable contracts simply make sure that a contract is valid in all the jurisdictions it is required to be operational in.

That way, if you have an agreement with a manufacturer overseas, the clauses of the contract can apply both in Australia as well as the country they reside in.

You’ll need an experienced legal professional to draft this one for you. Talk to us today about getting a contract that can be enforced internationally!

Starting An Online Business In South Australia

When a business is online, it opens itself up to a number of additional legal obligations. Having an online presence for your business (whether it’s completely online or partly online) also means there are more risks you need to think about. Thankfully, the right legal documents can help with this. Read on to learn more.

Website Terms And Conditions

Website Terms and Conditions can be used to limit your liability and give you more control over your business’ website.

When users enter your website, they need to agree to the e terms and conditions to keep using it. The document lets them know what is expected of them while they are on the site. If a user violates any of the policies listed in the terms and conditions, you have the authority to take warranted action.

Terms and conditions can also contain other important information regarding payment, protection of your business’ intellectual property, shipping and return policies. Essentially, it can be catered to meet your individual needs so you can communicate everything required to your audience.

Privacy Policy

If your business has an annual turnover of more than $3 million, then you are required to have a Privacy Policy in place according to privacy laws. A Privacy Policy is an online statement that users can view once they enter your website, essentially letting them know what information of theirs is being collected and what is being done with their information.

On top of businesses that have an annual turnover of more than $3 million, the Australian Privacy Principles (APP) and the Privacy Act 1988 require all businesses collecting any kind of personal information from their users to have a Privacy Policy in place.

Personal information can include:

Emails
Names
Addresses
Phone numbers
Bank details
Passwords
Employment details

If you collect even one kind of private detail off your users, then you are legally required to have a Privacy Policy in place.

Cookie Policy

Cookie Policies allow users on your website to know which of their activities are being tracked and for what reasons. Unlike a Privacy Policy, a Cookie Policy isn’t always strictly required (although you might want to check with a legal professional to see if you need to have one).

However, businesses often choose to be transparent with their users and build trust with them by having a Cookie Policy in place, regardless of their legal obligations.

Buying A Business In South Australia

Instead of starting a business from scratch, you might be thinking of purchasing an already established business.

There are two main ways for a business to sell: hrough a share sale or an asset sale.

A share sale is when the shares of a business are transferred to another person. When a share sale occurs, any liabilities and debts attached to the shares are also transferred to the new owner of the shares. With this in mind, new owners of shares might want to have an indemnity signed prior to securing any sales.

An asset sale where everything or some of the things that belong to a business are purchased by a new owner. This can be buildings, property, cars, domains, client lists – essentially any assets that belong to the business.

For an asset sale, the management of the business doesn’t usually change. There is simply a new owner of the business assets.

Another way to buy into a business is to purchase a franchise. Buying into a franchise is an attractive option for some business owners as you receive the benefits of an already functioning business, just in a new location.

If you’re thinking of getting into the franchise business, it’s a good idea to familiarise yourself with the Franchising Code of Conduct (FCC) first so you can be aware of what to expect. Additionally, it’s strongly advised that you seek the help of an expert franchise lawyer so you know that you’re legally compliant and protected in various situations.

What Else Should I Know?

Along with registering your business and getting the right legal documents in place, you will also need to make a couple of other considerations regarding your legal obligations and protecting your assets.

Read on to learn more.

Protecting Your Intellectual Property

Your intellectual property (IP) refers to the intangible assets belonging to your business as they have been created from the mind. For example, a logo, art, originally written work, composition or a design can all be considered your intellectual property.

Generally speaking, there are two main ways you can protect your intellectual property.

The first is getting it registered with IP Australia. You can get a trade mark, patent, design or plant breed registered with them. If you want to own your business name and have it legally protected, then you can seek to have it registered as a trade mark as well.

Not all forms of IP can be registered with IP Australia, which leads us to the second way of protecting your IP – through legal documentation.

Confidentiality clauses, Non-Disclosure Agreements (NDAs) and disclaimers (along with your business’ internal process) can aid in protecting your business’ IP. For example, you might have a confidentiality clause in your employees’ Employment Contracts so they don’t reveal private information to people outside of the business.

It’s better to consult a legal professional to see what methods are best to protect your IP.

Meeting Your Employer Obligations

As we noted above, having an Employment Contract or Contractor Agreement in place is just one way of ensuring you’re doing your job as an employer.

Employers have a number of obligations towards their employees, usually known as a duty of care under Workplace Health and Safety regulations. When employees are at work (both physically and remotely), it is the responsibility of their employer to make sure they do not suffer any harm mentally or physically as a result of their workplace.

Safe Work Australia sets the standards on how employers should ensure they are fostering a safe work environment. Doing so can range from providing safe equipment to training all employees in workplace bullying or harassment. In any case, you need to be aware of your duties and carry them out to be in compliance with employment regulations.

Another aspect of your obligations as an employer includes ensuring your employees are receiving the correct awards and entitlements.

Fair Work Australia and the National Employment Standards (NES) provide comprehensive guidelines on what some industries and certain types of employment can expect. It’s important to become familiar with these. For example, your employees may be under a certain award which provides different entitlements to those under the NES.

If you are underpaying your employees or not correctly awarding them, you are likely to be in violation of employment laws. It’s best to do your research or talk to a legal expert to make sure you’re on the right track to fulfilling your employer obligations.

Apply For Licences

Some industries and types of businesses will require a licence. For example, if you are starting a child care business or thinking of finally getting that food truck idea running, there are different types of licences you will need to attain. You can check out the Business Licence Finder to see what you may need.

Licensing and permission can also depend on your location. Some local councils will have their own requirements so be sure to check in with your local government for any additional requirements.

Key Takeaways

Launching a new business in South Australia requires a lot of thoughtful care and planning. With the right legal help,you can give your business a great start! To summarise what we’ve discussed:

Make a business plan with all your research and ideas to start off with
Choose a business structure and register your business accordingly
You will also need to register your business name unless you meet one of the exceptions
Get all the relevant legal documents in order, such as shareholder agreements and employment contracts
If your business is going to be online, you will likely need additional legal documents
You can purchase a business through asset sale, share sale or buy into a franchise
Look into protecting your IP through registration or legal documentation
Ensure you meet all your employer obligations towards employees
Apply for any licences you may need to run your business

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

Sapna Goundan

Sapna has completed a Bachelor of Arts/Laws. Since graduating, she's worked primarily in the field of legal research and writing, and she now writes for Sprintlaw.

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