What are the Legal Requirements for Starting a Business in Australia?
Legal Requirements for Business
When considering the legal requirements for a business and the legalities of starting a business, it is important to recognise there are a number of government regulations for business in Australia. These include having an Australian Business Number (ABN) and registering for Goods and Service Tax (GST).
What is an Australian Business Number?
An Australian Business Number (ABN) is a unique 11-digit number used to identify your business to the Government. If your business has an annual turnover of or above $75,000 per annum, you are required by the Australian government to obtain an ABN. It is important to have an ABN if you run a business as it keeps track of your businesses transactions and allows you to register for Goods and Service Tax which is explained below.
Registering for GST
The government requires businesses in Australia that have an annual turnover of or above $75,000 per annum to register for Goods and Service (GST) Tax. GST is an added tax of 10% on most goods and services. In order to register for GST, you must have an ABN (explained above), the number of which will also be your GST registration number.
Businesses are required to lodge either quarterly or monthly a GST return with the Australian Taxation Office.
Industry Specific Legislative and Regulatory Requirements
Within the legal realm of business, there isn’t a ‘one size fits all’ pathway. While the government requires businesses of all backgrounds to meet certain obligations, it is also important to consider whether there are industry specific legislative and regulatory requirements particular to your business. For example:
- Food Industry Legal Requirements
If you plan to own a business in the food industry, there are different legal requirements you must satisfy compared to someone who owns a business in the manufacturing industry. For example, businesses who sell food or drink must have a Food Act 1984 registration from their local council. There may also be different registrations and/or licenses to obtain dependent on the type of food you are selling, including dairy, meat, and seafood. You also have the obligation to produce food that is safe and of quality for consumption which is regulated under various government laws and regulations.
- Manufacturing Industry Legal Requirements
Depending on the goods you produce, your legal obligations when owning a business in the manufacturing industry can vary. Some products require very specific licenses to produce. These include, but are not limited to, alcohol, petrol, chemicals, electrical equipment and medicines. Whether there are laws and regulations will depend on the specifics of your manufacturing business.
- Retail Industry Legal Requirements
When operating a transactional retail outlet, there may be a myriad of legislation and industry standards and obligations. Firstly, you will need to acquire the appropriate licenses and permits relative to where you operate, and what you sell.
If your company employs workers, you must register for WorkCover insurance. WorkCover insurance ensures that you will be insured for the cost of benefits if employees are injured or become unwell due to their work. This can include legal, medical treatment and rehabilitation costs, as well as replacement of lost income, and lump sum compensation in the event of a serious injury. If your business pays less than $7,500 a financial year in remuneration, or you are a sole trader, you don’t need to register for WorkCover. However, failure to register for WorkCover insurance when you are required to can result in severe penalties. To register for WorkCover insurance, visit worksafe.vic.gov.au/how-register-workcover-insurance.
Intellectual property is the intangible thoughts and ideas of your business. There are many different types of intellectual property that must be considered when starting a business. These may include trademarks, inventions, and designs.
Although there are no government laws or regulations compelling you to register your intellectual property there are laws designed to protect your ownership, so that, for example, another business cannot copy a name, logo, idea or plan which originated with you. Registering and protecting ownership allows your business to grow and maintain its value. To receive further information on how to protect your intellectual property, visit our blog post detailing how to do so.
Key take aways
There are legal requirements for starting a business in Australia that apply to all businesses and there are also requirements that are business specific. We can help you navigate this complex legal minefield.
Lord Commercial Lawyers is a commercial and business-focused law firm based in the Melbourne CBD. We work with businesses and individuals to help them achieve their legal and commercial goals.