From Incorporation to Licensing: A comprehensive Guide to the Legal Requirements for Registering a Start-Up Business in Australia

1. INTRODUCTION

Before starting up any business, it is super important to understand the legal requirements for a start-up, FMCG or SME. Compliance with local, national, and international laws and following regulations across the board can help avoid fines, penalties, and legal action down the track. It’s a no-brainer.

Additionally, understanding your legal requirements can protect your startup/company assets and intellectual property and ensure that contracts or agreements are legally binding. Furthermore, it can also help your business to avoid any legal disputes which can empty the bank of any profit, quickly become a drain on company resources and dare we say, flipping time-consuming. 

When setting up shop, it is vital to seek professional counsel and work towards establishing a company’s legal framework from the get-go; ensuring it is compliant with all relevant regulations and is set up for long-term success. 

2. BUSINESS STRUCTURE

A new business could include any of the following:

Sole trader: This is the simplest and most common form of business structure in Australia. A sole trader is an individual who owns and operates the business and is personally liable for all debts and liabilities.

Partnership: A partnership is a business structure in which two or more people share ownership and management of the business. Partners are jointly and severally liable for all debts and liabilities of the partnership.

Company: A company is a separate legal entity from its shareholders, and is generally considered the most complex business structure. Companies are required to be registered with the Australian Securities and Investments Commission (ASIC).

Cooperative: A cooperative is a business structure in which the members collectively own and control the business. Cooperatives are typically used for businesses that provide a service or product to the members, such as a credit union or a retail store.

Superannuation fund: Superannuation funds are used to provide retirement income for members, also known as self-managed superannuation funds (SMSFs).

3. TAXATION LAW

There are several tax considerations for start-ups in Australia, including:

GST: Most businesses with a turnover of more than $75,000 per year are required to register for and charge Goods and Services Tax (GST) on their sales.

Income tax: Start-ups will need to register for an Australian Business Number (ABN) and a Tax File Number (TFN), and will be subject to income tax on their profits.

Payroll tax: Employers are required to pay payroll tax if their total Australian taxable wages exceed a certain threshold, which varies by state.

Capital gains tax: Start-ups may be subject to capital gains tax when they dispose of assets, such as property or shares.

Research and Development (R&D) Tax Incentive: Eligible companies can claim a tax offset for R&D expenditure, which can be significant for start-ups.

Tax Incentives that require legal understanding

There are also tax incentives in Australia that are designed to encourage certain activities depending on the set-up of your start-up /or fledgling business and it is important for companies to understand and comply with the legal obligations associated with these incentives to ensure they can access the benefits offered.

Here are a few examples.

  1. The Research and Development Tax Incentive (RDTI) is available to eligible companies that are conducting research and development activities in Australia. It provides a tax offset for eligible R&D expenditure and can be used to offset the cost of developing new products, processes or services. To be eligible, you must ensure your R&D meets the R&D definition under the required legislation. 
  2. The Early Stage Innovation Company (ESIC) tax incentive provides a range of tax concessions for eligible companies that are working on new or innovative products, services or processes. It allows for a reduced tax rate on capital gains, tax exemptions on certain types of investments, and access to other tax concessions. To be eligible for this incentive you need to be incorporated, but not listed on the ASX, meet conditions related to your innovation activities and have an income of less than $20 million.
  3. The Entrepreneurs’ Infrastructure Programme (EIP) provides funding and support to eligible small businesses and start-ups to help them grow and commercialise their products, services and processes. This program can help with funding for research, development, and commercialisation of new ideas. To get funding for the EIP,  you need to be a SME with a business objective that aligns with the program’s objectives and follow the legal guidelines for accessing funding and support.

4. EMPLOYMENT LAW

In Australia, employers are required to comply with a range of federal and state laws when hiring employees. These include providing a minimum wage, leave entitlements, and non-discrimination protections. Additionally, employers are required to create and maintain a safe working environment for their employees.

The Fair Work Act 2009: This federal law sets out the minimum standards for employment in Australia, including minimum wages, leave entitlements, and non-discrimination protections.

The National Employment Standards (NES): This set of minimum employment standards that apply to all employees in Australia, regardless of the type of employment or the industry they work in. These standards include annual leave, personal/carer’s leave, compassionate leave, community service leave, and long service leave.

Anti-Discrimination laws: Employers are prohibited from discriminating against employees over certain attributes, including race, sex, age, and disability. Employers are also required to take reasonable steps to prevent discrimination, harassment, and bullying in the workplace.

Work Health and Safety laws: Employers are required to ensure the safety of their employees in the workplace. This includes providing a safe working environment, adequate training and supervision, and procedures for responding to incidents and accidents. Employers must also comply with specific safety regulations in their industry.

Industrial Relations laws: Employers need to be aware of the industrial relations laws that apply to their industry, including the terms and conditions of employment, including the rights and obligations of employers and employees concerning employment

5. INTELLECTUAL PROPERTY

There are several different types of intellectual property (IP) rights recognized under Australian laws, including:

Copyright: This protects original literary, dramatic, musical, and artistic works, as well as films, sound recordings, and broadcasts.

Trade marks: Trade mark signs, logos, and symbols are used to distinguish goods and services from those of others in the marketplace.

Patents: This protects new and innovative products, processes, and technologies.

Designs: This protects the visual appearance of a product, including the shape, configuration, pattern, or ornamentation.

Plant Breeders’ Rights: This protects new plant varieties.

Circuit layouts: This protects the layout of integrated circuits.

Confidential Information: This protects information that is not generally known and would be of commercial value if it were generally known.

Conclusion

The merits of legal compliance for a start-up cannot be overemphasized and entrepreneurs need to familiarize themselves with the laws and regulations that apply to their various enterprises. This includes understanding the registration and compliance requirements for taxes, licenses, and permits, as well as laws related to employment, consumer protection, and intellectual property. By complying with legal requirements, entrepreneurs can set their startups on a path to success and avoid potential legal issues down the road. 

Failure to comply with these laws can result in significant financial and legal consequences for the business and its owners. Entrepreneurs are advised to seek professional legal advice if they have any doubts or questions about the legal requirements for starting a business in Australia. With all that said, nothing happens until you start your adventure, so get your hustle on and make it happen.

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Mark Lazarus

Mark Lazarus, the visionary behind the business and the fresh blood of the Lazarus Legal team, Mark (or Laz as he is often known) owes much of his success to his past experiences. And he’s made it his personal goal to bring that wisdom and formula to the firm.

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From Incorporation to Licensing: A comprehensive Guide to the Legal Requirements for Registering a Start-Up Business in Australia

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Barry Lazarus

CEO & Notary Public

barry@lazaruslegal.com.au 

We’d be lying if we told you that this bloke isn’t the big honcho of our team, but his name is a dead give-away. The founder of Lazarus Legal, Barry is an old school, tough as nails lawyer. They don’t forge litigators like this anymore.

With decades of experience in both Australia and South Africa, his wisdom is as renowned as his name. Back in the days when Schwarzenegger and Van Damme were kicking ass on VHS, Barry was kicking ass in the courtroom. And after all these years, he still has a reputation for refusing to back down.Barry is definitely the badass you’d want in a fight – in court or otherwise. But really, he’s a big softie. Just don’t let him know you know that (although he probably won’t read this anyway – navigating the Internet is not his strong point).

Aside from putting other lawyers in their place, taking long walks on the beach and spending time with his family, Barry enjoys seeing others succeed. Not only is Barry a staunch and unmoving litigator, he has sharp business and commercial acumen having started up ventures from scratch and growing them into full-blown franchises – from real estate to creating ice cream, to making pasta. With his experience on both sides of the commercial and legal equation, you want this guy to be on your side, whether you’re the next Zuckerberg realising your genius, or the next Zuckerberg taking on your opponents in court.

When Barry is not busy lawyering about, he is a part-time lawn bowler and a wannabe comedian, but never took both as a day job, because let’s face it, he’s a lot better at his day job.

If someone ever threatens you to lawyer up…relax, call Barry and he’ll handle the rest. 

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Mark Lazarus Director

Mark Lazarus

Director

mark@lazaruslegal.com.au 

The visionary behind the business and the fresh blood of the Lazarus Legal team, Mark (or Laz as he is often known) owes much of his success to his past stories and experiences. And he’s made it his personal goal to bring that wisdom and formula to the firm.

He’s a bit of jet setter, splitting his time between Australia and the UK, maximising every hour of his professional life. He thrives on this adrenalin. It allowed him to work in private practice in Sydney, act for a host of famous celebrities in London, do a two year stint as a NSW barrister (and not the pretentious coffee type in the Melbourne laneways) and more recently did a gig as the Legal Director covering Europe, the Middle East and Africa for one of the world’s coolest fast-moving consumer good brands!  

As an Aussie and UK lawyer and former barrister, Mark not only has the gift of the gab but he’ll walk the walk to prove it too. He likes to think he’s a bit like Harvey Specter or Michael Corleone, the main difference is you can actually retain him as your lawyer and consigliere. He’ll tell you how it really is and will take on any challenge head on. Although litigation and court advocacy comes naturally to him, commercial and IP is what gets his blood pumping! 

When Mark is not out there doing his thing, you will probably catch him chilling at home with his family, on the sidelines of the soccer (football) pitch cheering on his two boys, crawling through mud obstacles, or training hard at the gym. Passion and commitment is what drives Mark to succeed, along with his burning desire to disrupt the legal profession by finding new ways to change the game.

He has sights on the future. So if you’re breaking new ground, ahead of the times, and on the verge of something big, but you need someone who’s got your back and who can give you straight up advice, this is the guy you will want on speed dial.

Rise above...

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