Meeting your legal obligations
You must understand your legal obligations when you start or run a business. If you do not meet your obligations under the law your business can experience serious problems.
A range of legal requirements may affect your business. For this reason, it's important to seek legal advice from your solicitor and other specialist advisers before you start your business.
Many of the legal obligations your business must meet can actually be ;beneficial to your business. For example, accurate record-keeping is a requirement under taxation laws – and it also helps you to minimise losses and manage your cash flow.
Before you start your business, seek legal advice from your solicitor and other specialist advisers.
Review your legal requirements on a regular basis. Your business may change over the years, and so may legislation.
- You must keep all registrations for your business structure up to date. For example, your business name 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.
- If you go into a partnership, your solicitor should draw up a written contract before you begin trading or make any financial commitments.
- Retail shop leases must comply with the Retail Shop Leases Act 1994.
- Your solicitor should read any lease before you sign to ensure the terms and conditions are appropriate and you understand your obligations before you sign.
- If you operate a home business, your local council may limit the number of people who can work there. Use the local government directory to find contact details for your local council.
- Protecting your intellectual property (IP) gives you the legal entitlement to that IP. 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, you must understand your obligations as an employer. These vary depending on the type of staff you hire, which may be:
- permanent (full-time or part-time) employees
- 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).
It is important for you to understand employment legislation and your obligations towards the people who work for you. Obligations can cover considerations such as:
- pay as you go (PAYG)
- payroll tax
- awards, pay rates, leave and employee entitlements
- workers' compensation insurance
- recruitment processes
- induction and other training
- work health and safety
- anti-discrimination and equal employment opportunities
- dismissing staff.
Visit the Fair Work Ombudsman to understand awards, pay rates, leave, employee entitlements and hiring and termination information.
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.
- Contract law is complex. Your solicitor can develop standard agreements for your business to reduce confusion and costs.
- All parties must have the legal capacity to enter into a contract.
- A contract of sale involves an exchange of goods, services, or property from the seller to the buyer for an agreed amount. It refers to a specific type of legal contract.
- Safeguard your customers privacy by complying with state and national privacy laws. Read more about privacy and information management.
- Your business must have a responsible attitude to HSE issues.
- You have a duty of care to the health and safety of your staff, customers and the general public as per the Work Health and Safety Act 2011.
- You also have a responsibility to address environmental issues. Learn more about the environment and your business.
- Health, safety and environment issues include workers' compensation, food handling and safety, safety related to construction sites, ergonomic requirements and security issues.
- Find out about your legal obligation to create a safe workplace.
- Learn more about keeping your workplace safe.
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.
Use Business Launchpad to save time and effort when starting your small business. Business Launchpad is a new digital tool that makes it easier to discover licences, permits and regulatory information tailored to your business needs.
Visit ABLIS (Australian Business Licence and Information Service) to find the Australian, Queensland and local government licensing information specific to your business.
Contact your local council
Every council 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 gain council approval for any relevant issues before you begin operating.
There are many areas of your business that you may need to register, including your business name, trademark and domain name, as well as registering your business for tax. Learn more about getting the right licences and registrations for your business.
Your business's tax requirements will vary according to the type of business you run and the number of employees you have. Tax is a complex area. Outsourcing your tax to a professional or employing an experienced accountant can help you to avoid legal and financial problems.
Learn more about the basics of managing your tax requirements.
Keeping accurate and up-to-date records is vital to the success of any business. Well-kept records help you to minimise losses and manage cash. It is also a requirement under taxation laws. Your accountant can help you set up a record-keeping system.
Learn more about financial record keeping requirements.
- Manage risks by avoiding them, minimising their negative effects, transferring them to another party, or deciding to accept some of the possible consequences should they arise.
- Several forms of insurance can help with risk management. Read more about risk management.
- Learn more about managing risk when starting up.
Being uninsured, underinsured or having the wrong kind of insurance could force your business to close in the case of fire, staff or customer injury, personal illness, product defects or staff errors. The right insurance can keep your losses to a manageable level.
There are many common types of business insurance available. Only a few are required by law. The main 2 are workers' compensation insurance and compulsory third party (CTP) insurance. Workers' compensation is compulsory for all employers. CTP insurance is compulsory for all motor vehicles.
Some industries have specific insurance requirements, so check with your insurance company or broker.
Learn more about types of insurance.
A professional insurance broker can help you make the right insurance choices. They can put together a comprehensive and cost-effective package of insurance policies for your business. You should seek specialised advice if your business is classed as a high insurance risk. Contact the National Insurance Brokers Association to find a broker.
- You must meet legal obligations when conducting business online—these are designed to protect you and your customers.
- Make sure you are complying with rules around:
- storing and collecting customer information
- intellectual property
- consumer law
- electronic transactions.
- Learn more about legal obligations for online businesses.
- Last reviewed: 18 Jul 2017
- Last updated: 12 May 2022
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