Starting a new business is equal parts exciting and daunting. Starting your own business, regardless of the size, can be extremely rewarding. In fact, for many individuals, it is an ultimate dream or goal to start their own business.
While there are already many formalities that they must complete, there is also a whole set of legal aspects they need to consider before setting up their business.
For those who are interested in setting up their own business, having an understanding of their legal responsibilities is crucial.
In this article, we discuss important legal steps that individuals who wish to set up a new business must complete. These are extremely important to ensure that the business runs smoothly.
#1 Business structure
It is important to decide the legal structure of your business. The legal structure of your business can affect tax implications and other accounting matters.
There are different types of business structures such as:
- Joint venture
- Sole trader
Generally, before an individual decides their business structure, they check which type of tax structure will be most suitable for them.
For instance, sole traders will have personal liabilities for all debts of the business. Moreover, they will need to report business income in their personal tax return.
On the other hand, two or more partners can share profits and losses if they have a partnership business structure.
It is ideal for individuals to assess the advantages and disadvantages of the various business structures before choosing one.
Depending on the kind of business you wish to set up, you will require various licenses. While there might be some general licenses that each business will need, there will also be a set of licenses required within specific industries.
For example, business in the food industry require a unique license to be legally recognised. Moreover, almost all businesses will require a trading license, sales tax permit and a business license.
It is very important to register the business name or trading name as trademark. Additionally, before you decide a name, it is important to go thorough searches to ensure that your name is unique and that there isn’t another business registered under that name.
Commercial lawyers can help with registration trademarks. This is very important under intellectual property law. Trademarks protect the identity of your business and allow consumers to easily identify the business.
#4 Health and safety
Health and safety include laws on security and safety in the workplace. You will need to implement safe practices and install equipment for safety in the workplace.
Essentially, people who want to start a venture need to check different ways in which they can eliminate or at least minimise risk in the workplace. This includes providing adequate facilities to any potential employees.
You need to make sure that your business is insured. This also includes all equipment you use such as computers. It is advisable to take out business insurance on equipment.
Business or commercial lawyers can help start-up founders, small business owners and large corporations
To summarise, before starting a business, you need to look into ways to register trademark, negotiate contracts and license registrations. Lastly, you have to go over HR policies if you plan to recruit staff.
There are other legal responsibilities for people to follow when setting up a new business. However, the above-mentioned points are some of the most important considerations that you will need to make.
John Bui is the Principal Solicitor of JB Solicitors – a law firm based in Sydney, Australia. John has extensive knowledge in the areas of family law and commercial litigation.