Surviving The First 6 Months As A Startup (2025 Updated)

So, you’ve decided to build a startup-some pretty exciting stuff! As we move through 2025, the entrepreneurial landscape is thriving with fresh opportunities and a rapidly evolving legal framework.

You’ve got a bunch of new ideas and expectations for how your new business will take off, but you might be skimming over one of the most crucial aspects: your legals. In this digital age, ensuring you have the correct legal safeguards in place is more important than ever.

We know how exciting it is to jump headfirst into the startup world. However, as with any business, there are a number of risks and obligations you need to be aware of when launching your venture. Without the right agreements or contracts in place, your startup could face unnecessary setbacks.

The first 6 months are crucial for ensuring your startup’s future success. Here are some legal tips to keep in mind as you build your business on a robust legal foundation in 2025.

Choosing The Right Business Structure For Your Startup

The first thing to consider is your business structure. This decision will shape how you manage risks, meet your tax obligations, and plan for growth over the coming years. In 2025, with regulatory updates and market shifts, it’s more important than ever to choose a structure that aligns with both your short‐term ambitions and long‐term goals.

When choosing your business structure, it’s important to consider your:

• Budget
• Priorities
• Anticipated business size
• Tax obligations
• Parties involved (for example, suppliers or manufacturers)
• Liability and other inherent risks

Setting Up As A Sole Trader Or Partnership

If you want to keep your startup small and straightforward, opting for a sole trader or partnership structure could be ideal. Many founders appreciate the simplicity and lower overheads of these setups, which also allow you to remain agile.

This option may be your first preference because it’s generally cheaper and easier to manage than establishing a larger company. Your tax obligations tend to be less complex and, essentially, you’re your own boss-though this freedom comes with some trade-offs.

For instance, a sole trader or partnership structure has unlimited liability, meaning you are personally responsible for any business debts. If you’ve taken out loans to get your startup off the ground and are unable to repay them, those debts will fall on you personally.

While these risks can seem daunting, you can mitigate them by securing the right insurance cover and putting robust contracts in place. For further guidance, check out our detailed regulatory compliance guide crafted for startups in today’s market.

If you later decide that the benefits of a more formal structure outweigh the simplicity of being a sole trader or partnership, you can always explore converting your business structure. Read our insights on this topic in our Sole Trader vs Company guide.

Setting Up As A Pty Ltd Company

Generally, the more risks you face, the more protection you’ll need. This is where a company structure comes into its own. Forming a proprietary limited (Pty Ltd) company not only provides you with limited liability protection, but it also helps establish a professional image for potential investors and partners.

Under a company structure, your startup is a separate legal entity. Thus, if the business incurs debts or liabilities, those obligations are strictly the company’s responsibility-not yours personally. This separation is one of the key benefits of incorporating.

Of course, the enhanced security comes at a higher administrative cost and complexity. You’ll need to adhere to more rigorous reporting and corporate governance standards, so it’s important to carefully weigh your options before deciding on the best structure for your startup.

Registering Your Company

Once you’ve settled on your structure, your next step is to register your company. Whether you’re operating as a sole trader, partnership, or Pty Ltd company, registration is a vital step in making your business official.

If you’re running your startup as a sole trader or partnership, you’ll need to apply for an Australian Business Number (ABN), which you can do for free here. Additionally, our Register a Business in Australia guide offers up-to-date advice on these processes.

When registering your business, be sure to sort out the following essentials:

• Superannuation arrangements
• Appropriate insurance coverage
• Your income tax setup
• Invoicing systems
• Customer contracts and service agreements
• Your Tax File Number (TFN)

You’ll also need to register your business name. Remember, registering a business name doesn’t secure exclusive rights-that’s why you should consider a trade mark registration to protect your brand fully.

If you decide to set up a company, there are additional steps to follow:

• Appoint directors and shareholders (directors manage the company, while shareholders retain ownership rights)
• Apply for an Australian Business Number (ABN)
• Record your Australian Company Number (ACN), which you’ll receive upon registration with ASIC

After registering your company, it’s imperative to keep your details current. As noted in our post-registration checklist, promptly report any changes-such as a new business address-via ASIC’s online update service.

Raising Capital

For startup founders, raising capital is often top of mind. Whether you’re seeking funds to cover ongoing operations or propel rapid growth, choosing the right method of capital raise is essential for long-term success in 2025.

Generally, there are two primary ways to raise capital:

• Debt Raise: Borrow money from institutions or individuals and repay with interest. It’s usually wise to have a formal Loan Agreement in place to safeguard both parties.
• Equity Raise: Sell shares in your company in exchange for capital. Protect investor interests and clarify your company’s operational framework with well-drafted documents such as a Shareholders Agreement or a Share Subscription Agreement.

Additionally, monetary investments can be converted into shares through mechanisms like a convertible note or a SAFE note. Recent regulatory adjustments in 2025 have streamlined these processes, making them an attractive option for many startups.

It’s also worth considering raising capital from family and friends and exploring options such as preference shares to diversify your funding strategy.

Protecting Your Brand

Your brand is one of the most valuable assets of your startup. In a competitive market, safeguarding your brand’s name, logo, and other intellectual property is vital. So, what happens if someone else starts using your brand’s identity?

Startups must take proactive measures to protect their intellectual property (IP). Here are a few essential steps:

• A Non-Disclosure Agreement (NDA) protects sensitive business information during discussions with external parties, ensuring your ideas remain confidential.
• Trade Marks: Once your branding is finalised, register a trade mark with IP Australia by following our trade mark registration process to secure exclusive rights to your brand elements.
• Copyright: Australia’s copyright laws protect your original work automatically. For added security, consider including copyright disclaimers on your creative materials.
• Pitch Deck Disclaimers: Include disclaimers in your pitch materials to clarify that the content, designs, and slogans are your IP and cannot be reproduced without permission.

In addition, it’s advisable to periodically review your IP portfolio using our trade mark renewal services to ensure ongoing protection in line with 2025 standards.

Managing Your Relationships Well From The Start

Startups can’t thrive without strong relationships. Whether it’s with co-founders, investors, employees, or suppliers, managing these relationships through clear agreements is key.

Make sure you’re setting the right expectations from the outset to avoid disputes later. Regularly reviewing and updating your contracts and internal policies-especially in light of the latest 2025 legal developments-is a good practice.

Managing Your Relationships With Co-Founders & Investors

To attract potential investors, you need to demonstrate that you and your co-founders are organised. A Founders Term Sheet sets out decision-making processes and outlines future plans, giving investors greater confidence. While it’s generally not legally binding, it establishes a clear framework before you formalise matters with a detailed Shareholders Agreement.

Managing Your Team

Employers must meet numerous obligations under Australian law, such as paying minimum wage and ensuring workplace health and safety. It’s best to have these commitments clearly documented in Employment Contracts that outline salary, leave, IP ownership, and more. For startups looking to boost motivation, consider implementing an Employee Share Scheme that rewards performance and fosters loyalty.

If you’re engaging contractors instead of employees, ensure you have a well-drafted Contractor Agreement to clearly define the terms and responsibilities. Similarly, for interns, a tailored Internship Agreement can clarify payment, entitlements, and work expectations.

Managing Your Shareholders

If your company has multiple shareholders, having a Shareholders Agreement in place is essential. This legally binding document outlines the dispute resolution and decision-making processes and specifies what happens if a shareholder exits the company. For more detailed information, read our Shareholders Agreement guide.

Managing Your Supplier Relationships

If you work closely with suppliers, it’s prudent to have a Supply Agreement in place. This agreement details the roles, responsibilities, and dispute resolution mechanisms, helping to limit liability and protect your startup’s operations.

Protecting Yourself With The Right Insurance

While we’ve covered various risk management strategies, you also need to consider practical measures such as insurance. In 2025, comprehensive startup insurance packages are more accessible than ever-often bundling Workers Compensation, public liability, and even cyber liability for digital businesses.

Workers Compensation is compulsory for Australian businesses, ensuring your employees are covered for work-related injuries or losses. Meanwhile, public liability insurance protects your business from claims related to accidental damage or injury, providing you with financial peace of mind as you focus on growth.

Establishing Strong Terms & Conditions

No matter what kind of startup you operate, having clearly defined Website Terms and Conditions is essential. These terms limit your liability and set expectations for website users, reducing the risk of disputes.

Similarly, you should establish terms and conditions for any service you provide. These contracts clearly outline responsibilities, potential liabilities, and resolution processes, thereby fortifying your business against unforeseen issues. For additional insights, you might also want to review our guide on building a strong legal foundation for your startup.

Ensuring that your contracts and policies are up to date with current legislation is not only smart-it’s essential for long-term stability.

Need Help?

Navigating your first 6 months as a startup can be daunting, especially with all the risks and responsibilities involved. To keep your startup resilient and compliant in 2025, our team of expert lawyers is here to provide tailored legal advice across every facet of your business.

If you require assistance with multiple areas of your startup’s legal setup-from business structure to comprehensive contract drafting-consider becoming a member. Membership offers unlimited phone consultations with our lawyers and discounts on our fixed-fee packages.

For more specialised support, explore our range of guides on topics like Industry Regulations and Intellectual Property, ensuring your startup’s compliance and competitive edge in 2025.

To discuss the best legal options for your startup, get in touch for a free consultation on 1800 730 617 or email us at team@sprintlaw.com.au. We’re here to help you build your business on a solid legal foundation.

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