Business legislation is not all in one place. It might feel like there’s so many things you need to know and it can be daunting.
Starting a legally compliant business can feel a bit like putting a puzzle together without the complete picture.
We’re here to give you a run down of what you need to know so you can ensure your business is compliant with the law.
This article will cover the ins and outs of a few legislations that are most relevant to business.
1. Registering Your Business
Below we provide a quick summary of the essentials of registering a business.
You might want to register for:
- An ABN
- Goods and services tax (GST)
- Tax file number (TFN)
- Pay as you go (PAYG) withholding
There are some differences for registering a company, you can read about that here.
Australian Business Number (ABN)
If you are running a business you will more than likely need an Australian Business Number (ABN). An ABN is the government’s way of identifying your business. It can also help identify your business to people you trade with.
Do I Need An ABN?
You should likely apply for an ABN if:
- you are continuing or about to start an enterprise within Australia
- you are making supplies connected with Australia’s indirect tax zone
- you are a corporation under the Corporation Act
The Australian Government will consider the following factors as indicative that you are intending on starting an enterprise:
- Advertising for your business – physically, on social media or on a website.
- Purchasing business essentials, premises or other stock i.e. business cars or stationary for the business
- Obtaining a license or insurance relevant to running your business
- Trying to obtain work for your business including bidding and providing quotes for services
- Consulting with business advisors i.e financial or tax advisors
- Trying to gather capital for your business including applying for financial loans from the bank
- Buying a business
You do not need to have all of these factors. The government will look at whether you have engaged in some of the above.
The Australian Government will consider the following factors as indicative that you are continuing an enterprise:
- There is significant commercial activity
- There is an intention to make a profit
- You are repeatedly carrying out this business
- There are systems, organisation and recording that is ‘business-like’
- There are similarities between your business activities and ‘like-businesses’ activities
- You have the relevant knowledge and skill to run the business.
This is not a strict test, but the above factors will be considered features of a business. Carrying out an enterprise also includes being a trustee of a super fund, operating a charity and renting out or leasing a property to someone else. This may not include renting out residential property.
What Does An ABN Do For Me?
An ABN is a great tool for running your business that simplifies a lot of things. It allows you to:
- Be easily identifiable to others when ordering or invoicing
- Ensure the payments your business gets are not counted towards pay as you go tax payments.
- Claim GST credits and energy grant credits
- Register an Australian domain name.
How Do I Get One?
Go to the government Business Registration Service and ensure you have the following:
- An identified business structure i.e. sole trader, partnership, company or trust
- Proof of identity and;
- Details of your business activities and associates.
Registering for an ABN is also completely free!
Goods and Services Tax (GST)
What Is GST?
GST applies to most products and services that are traded in Australia. It is a 10% tax and one that you pass onto your customers. The Australian Taxation Office will then ask for it when it is due.
Do I Need GST?
You will need GST if you meet any of the following criteria:
- The goods or services you trade produce a turnover of more than 75,000
- You are a non-profit and you turn over 150,000 or more on goods or services
- You are a taxi, limousine or ride sourcing service
- You want fuel tax credits
If you don’t meet these criteria then GST is optional, you can still register if you want!
How Do I Register For Gst?
To register for GST you have to have an ABN and then visit the Australian Government’s Business Registration Service
Tax File Number (TFN)
A TFN is another identification mechanism for the government and your business community. Registering your business for a TFN is important.
You need one to get an ABN and it helps you manage how you interact with the government including managing taxation.
What Type Of TFN Do I Register For?
This again depends on the structure of your company. If you are a partnership, company or trust you are going to need a business TFN. This is a TFN which is separate to your individual TFN that you would get as an employee. If you are a sole trader, you can use your individual TFN.
How Do I Register For A TFN?
Once you know what type of TFN you need, simply go to the Australian Government’s Business Registration Service and follow the steps.
Pay As You Go (PAYG) Withholding
As a business, the Australian Taxation Office will require that you withhold a certain amount of employees’ or contractors’ pay. If a business you interact with also does not give you their ABN you will have to withhold some of their pay too. To do this you have to register for PAYG withholding.
Registering for PAYG withholding must be done before you make a payment to any of the above parties. You can register at the Australian Government’s Business Registration Service.
What Obligations Do I Have Once I Have Registered?
Essentially, you must report activities statements and summaries of amounts withheld to both the ATO and you employees and PAYG withholding annual reports to the ATO.
There are two ways to do this.
- Sign up for the Single Touch PayRoll, a way to reduce business reporting burden and report amounts withheld through that.
- Lodge activity statement and withheld amounts to the ATO, provide payment summaries to all people you have paid by July 14 each year and provide a PAYG withholding summary annual report to the ATO by August 14 every year.
2. Fair Trading Laws
Fair Trading can be broadly summarised as a series of laws of ensuring your business is operating within the Australian market properly and protecting your customers from any harm involved with your product.
You need to be aware of the laws surrounding Fair Trading before you display prices, label products, offer secure card payments or offer warranties and refunds.
The Competition And Consumer Act 2010 (Plus State And Territory Equivalents)
The Competition and Consumer Act 2010 outlines legally enforceable standards for how all businesses in Australia conduct themselves with their customers, competitors and suppliers. It ensures fair trading. This Act is the federal version but there are also State and Territory equivalents which you will also need to be aware of.
You will need to be aware of how both the Federal Act and the State or Territory equivalent relevant to your business operate when considering how to treat your competitors and your consumers.
In this legislation you will find guidance on:
- What constitutes an unfair market practice
- Relevant Industry Codes
- How to conduct mergers and acquisitions
- Product safety standards
- Collective bargaining
- Product labelling
- Price monitoring and;
- Industry regulation.
If you are hiring or doing business with people you are going to be entering contracts. These are legally enforceable agreements and you have to know what you are getting yourself into and what is enforceable.
There is a lot of law surrounding contracts, whether you need to be compliant with the consumer law, or employment legislation such as the Fair Work Act. We’ve written more on unfair contract terms and employment contracts.
4. Data & Privacy Laws
The Privacy Act 1988 imposes a series of obligations on certain businesses which you will need to be aware of.
Do I Have Obligations Under the Privacy Act 1988?
The Privacy Act 1988 imposes obligations on all businesses with an annual turnover of more than 3 million dollars. However, there are other criteria that could make your business subject to obligations as well.
If you identify your business does, has or is any of the following you need to seek advice on your obligations under the Privacy Act 1988.
- A health service provider
- A company that trades in personal information
- You provide services under a Commonwealth contract
- You operate a residential tenancy database
- You are a credit reporting body
- An employee association
- A business that conducts protection against action ballots
- A business accredited under the Consumer Data Right System
- A business related to the Privacy Act, prescribed by Privacy Act Regulation 2013 or opted-in to be covered by the privacy Act.
More information on the Privacy Act and your businesses obligations under it here.
If you operate internationally, such as in the EU and you collect information from EU residents, you will also need to be compliant with the General Data Protection Regulation (GDPR).
5. Employment Laws
If you are a business that employs people you’ll need to be compliant with employment laws like the Fair Work Act 2009. . This section will cover some common obligations as well as anti-bullying laws and unfair dismissal laws.
As an employer you must:
- Pay your employees the correct amount according to your industry’s award amount or if there is not one, Australia’s minimum wage according to the employee’s age. Here’s a guide to payslips.
- Abide by Work, Health and Safety standards to ensure you manage the risk to your employees whilst they are working for you. This includes looking after your employees mental well being, ensuring you’ve provided a safe workplace, , protecting their personal information and not acting unfairly or discriminating against them.Have the right type of business insurance according to your needs. There are some types of compulsory insurance depending on your company. If you have employees you must have workers compensation insurance. Some businesses have a compulsory obligation to have public liability insurance. If your business involves owning a motor vehicle you must have third party personal injury insurance.
- If you work with vulnerable people or children you will also have to comply with any vulnerable people or children requirements of your state or territory.
Anti-Bullying, Harassment & Discrimination Laws
Harassment, bullying and discrimination are illegal in the workplace. As an employer you have obligations to make sure harassment, bullying and discrimination do not occur in your work place.
The definition of bullying at work is:
- ‘A person or group of people acting unreasonably towards an employee or a group of employees’ and this
- behaviour creates a risk to health and safety.
Harassment is defined as when bullying occurs repeatedly and does risk to their health or safety.
Unreasonable Behaviour includes:
- Behaving aggressively,
- Teasing or practical jokes,
- Pressuring someone to behave inappropriately,
- Excluding someone from work-related events or
- Making unreasonable work demands.
Discrimination is when a person is treated less favourably because of their sex, gender, race, disability, sexual orientation, age or religion.
As a business owner, even if not participating in the bullying, there are legal risks for not looking after your employees or protecting them from harm. Read a guide to workplace bullying, harassment and discriminsation here.
If you need to dismiss an employee you need to know that they could apply for unfair dismissal to the Fair Work Tribunal if you do it for the wrong reasons.
Valid reasons for dismiss include:
- Poor performance
- Unacceptable conduct
- Changes to operational requirements of the business
If you are dismissing someone for a reason you think may be construed as unfair, seek advice to protect yourself from legal action. You can find more information on unfair dismissal here.
According to the Fair Work Ombudsman you may be required to give notice when dismissing an employee. If an employee is under 45 the below table applies. If they are over 45 and they have worked for at least 2 years they get an additional week of notice.
|Period of continuous service||Minimum notice period|
|1 year or less||1 week|
|Between 1 and 3 years||2 weeks|
|Between 3 and 5 years||3 weeks|
|More than 5 years||4 weeks|
But Wait There’s More…
The above is a summary of the business legislation obligation that you are most likely to run into regardless of the business you are running. However, there are further obligations for specific businesses or businesses operating in a certain way.
- Franchises. There were a number of updates made to the Franchising Code of Conduct in 2021.
- Protecting intellectual property
- Importing and exporting business environmental protection obligations
- Food and beverage laws
- Packaging and labelling laws
If you are unsure about a certain obligation or an obligation that your business might have specifically, get in touch with us at firstname.lastname@example.org or on 1800 730 617 for a free, no-obligations chat.
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