Legal requirements for businesses

Reducing red tape survey

What are some examples of red tape that unnecessarily restrict Queensland small and family businesses?

Share your red tape examples.

You must understand your legal obligations when you start or run a business. If you don't, your business can experience serious problems, such as legal action, fines, business suspension and closures.

Various legal requirements that will protect your business and customers may apply, but they can also provide other benefits—for example, accurate record keeping is a requirement under tax laws and it helps you to minimise losses and manage your cash flow.

Get professional advice

Before you start your business, seek legal advice from your solicitor and other specialist advisers.

Review your legal requirements regularly because they may change if your business expands or alters how it operates, or if there are any amendments to the legislation.

Legal requirements

There are various aspects of your business that will have legal requirements that you will need to monitor for compliance.

    • You must keep all registrations for your business structure up to date. For example, if your business name is registered it must be renewed when due and you must lodge annual returns if you operate a company.
    • The Corporations Act 2001 (Cwlth) details requirements relating to companies and financial products and services. Learn more about company legal requirements from the Australian Securities and Investments Commission (ASIC).
    • If you enter a partnership, your solicitor should draw up a contract before you begin trading or make any financial commitments.
    • Protecting your intellectual property (IP) gives you the legal entitlement to that IP (e.g. you can take action against another business from selling your patented product as if they represent your business or copying and selling it without approval from you). You can protect your IP using trademarks, patents and designs.
    • You will need to review and, if appropriate, renew IP protection regularly (e.g. trademarks must be renewed every 10 years).
    • IP issues are complex and you should seek specialist advice.

  • Before hiring staff, you must understand your obligations as an employer. These vary depending on the type of staff you hire, which may be:

    • permanent employees (full-time or part-time)
    • casual employees
    • trainees or apprentices
    • contractors (working for a fixed term and who are established in their own business)
    • temporary employees (e.g. from an employment agency).

    Employer obligations

    You should understand employment legislation and your obligations to your employees, such as:

    Visit the Fair Work Ombudsman to understand awards, pay rates, leave, employee entitlements, and hiring and terminating.

    Visit the ATO for information about business tax requirements.

    Learn more about your obligations as an employer.

  • Getting your agreements with suppliers in writing will minimise misunderstandings and disagreements. Agreements may include creditor terms, supply conditions, and any marketing and promotion support.

Licences, permits and regulatory requirements

The licensing, permit, or registration requirements for your business will depend on your business type and structure, its location and whether you employ staff.

You must operate your business with the correct licences and permits. If you don't, you could face serious penalties.

Business Launchpad

Use the Business Launchpad to save time and effort when starting your small business.

The Business Launchpad is a digital tool that makes it easier to discover licences, permits and regulatory information tailored to your business needs.

ABLIS

Visit Australian Business Licence and Information Service (ABLIS) to find the federal, state and local government licensing information specific to your business or industry.

Contact your local council

Every council or local government area has different regulations. You can contact your local council, using the local government directory, to discuss town planning laws, zoning requirements and other issues such as home business requirements.

You must have council approval for any relevant activities before you begin operating.

Registrations

There are many areas of your business that you may need to register, including your business name, trademark and domain name. You will also need to register your business for tax.

Learn more about getting the right licences and registrations for your business.

Taxation

Your business's tax requirements will be complex and vary according to the type of business you run and the number of employees you have.

Outsourcing your tax to a professional or employing an experienced accountant, bookkeeper or tax agent can help you to avoid legal and financial problems.

Learn more about the basics of managing your tax requirements.

Record keeping

Keeping accurate and up-to-date records is vital to the success of any business and is a requirement under tax laws. It will help you to minimise losses and manage income and stock.

Your accountant can help you set up a record-keeping system.

Learn more about financial record-keeping requirements.

Risk management and insurance

You will need to manage risks to your business by:

  • avoiding them
  • minimising their negative effects
  • transferring them to another party
  • accepting the possible consequences of not acting.

Several forms of insurance can help with risk management.

Insurance to protect your business

By not having the right kind of insurance, your business could be forced to close in the case of fire, staff or customer injury, personal illness, product defects or staff errors.

Business insurance can keep your losses to a manageable level.

Compulsory insurance

Businesses must have certain types of insurance, mainly workers' compensation insurance and compulsory third-party (CTP) insurance.

Workers' compensation is compulsory for all employers. CTP insurance is compulsory for all motor vehicles.

Learn more about types of insurance.

Some industries have other specific insurance requirements—check with your insurance company or broker to see if this applies to your business.

Insurance brokers

A professional insurance broker can help you make the right insurance choice. They can supply a comprehensive and cost-effective package of insurance policies for your business.

You should get specialised advice if your business is classed as having a high insurance risk. Contact the National Insurance Brokers Association to find a broker.

Also consider...