Deciding to set up a business is just the first step in the process. You need to identify what you will do, who you will cater to, what the business structure will look like and multiple other aspects. Once you have a fair idea of what the business will look like, it will also need to be registered before you can begin.
The list of tasks to do may sound daunting but it does not need to be. Registration and taking off can be a simple process if you know what to do.
This article will help you understand what aspects you need to consider before registration and how to register your business in Australia.
1. What is your Business Plan?
Before you register your business, it is important to have a business plan. You will need an idea of what you want to do and what is the purpose of your business.
Identify your financial and marketing strategy and what relationships you need with your business partners to set up the business venture. All these will help you identify the type of structure you want to go with and that will affect the registration of your business.
2. What is your Business Structure?
Your business and marketing plan will help define the kind of business structure you need. The structure needs to be in line with your vision, corporate strategy and your business goals.
Identifying the right business structure for your venture is important. It helps determine your legal and financial obligations including tax obligations. To investors, it can also be reflective of the direction you wish to take as an enterprise.
There are 3 types of common business structures sole proprietorship, partnership and company. While the business structure can be changed later as you expand, choosing the right one initially can be critical to your endeavour’s success. When choosing the structure, consider the following aspects:
- Size and valuation of the business
- Risk assessment for the business
- Value of the initial capital
- The level of control you wish to have as an entrepreneur.
3. Register for the Australian Business Number (ABN)
All businesses in Australia are required to have an ABN with the Australian Business Register in order to be able to carry on operating. The Australian Business Number is an 11 digit number that identifies your business mainly for taxation purposes. The number also helps you with the following:
- Claim goods and services tax credits
- Register for PAYG Withholding
- Get a domain name for your business website and online presence.
Businesses registered as companies need to get an ACN before the ABN. The ACN is registered with the Australian Securities and Investments Commission (ASIC). It is a 9-digit code that helps identify the company for monitoring by the ASIC. After you have obtained the ACN and your business is up and running, you can apply for the ABN.
4. Protect your Business Name
When choosing a business name, it is important that you do not choose one that is already being used. A unique name helps customers identify you and differentiate between you and your rivals. Additionally, the business name eventually becomes symbolic of the reputation and the trust the business builds over time.
You can check the availability of your chosen business name through a search on the ASIC website which lists all existing businesses. Once the name is finalised, you can protect it in 2 simple steps.
- Register it with the ASIC. This is easily done through the ASIC website for a small fee.
- Register a trade mark. To ensure that no other businesses use the same name you can register a trademark and get exclusive legal rights to use the name.
Trade marks are a component of intellectual property and are used by businesses to protect their name and other important brand markers such as logos, slogans, etc. Using a trademark ensures that no other businesses can use these assets as you will have exclusive rights. Simply registering your business with the ASIC will not grant you exclusive rights to the use of the name and assets.
5. Register your Taxes
Your tax obligations will depend on the nature of your business and the structure you have chosen. A business lawyer can best help you understand your tax obligations and how to fulfil them.
However, regardless of what taxes apply to you and what your structure is, your business will require a tax file number (TFN). Sole proprietors can continue to use their individual TFN. However, if you are registering a partnership or a company, you will need to register a separate TFN for your business enterprise.
Small business owners generally have to register for the following taxes.
- Goods and services tax (GST) – The GST is a compulsory tax on all businesses with an annual turnover of more than $75,000. It is a tax of 10% on most goods and services sold or consumed in Australia.
- Pay as you go (PAYG) withholding – PAYG is also a compulsory tax which entitles you to withhold payments from employees and contractors who have agreed for you to PAYG for them. You need to know to record these withholdings and provide the amounts to the ATO.
- Fringe Benefits Tax (FBT) – If your business offers fringe benefits such as company car, low-interest loans, etc. you may have to pay the FBT.
6. Register For Licences And Permits
Licences and permits allow you to carry out certain activities as a business. They also protect your business and employees in cases of conflict or legal trouble.
Permits and licences vary from industry to industry and also depend on state and local laws. The licences you will need will depend on your business type, activities and where it is located. Your industry association or legal counsel can advise you regarding the permits you will require.
7. Register a Domain Name
In the virtual world, your domain is your business’ online address. You do not need to register a domain name until you decide to have a website for your business’ online presence. However, you can choose to register one when you’re ready to start your website.
The domain name can be registered through a reseller or a registrar on the .au Domain Administration Ltd. website. You will be required to check whether your desired domain name is available and you have an ABN or an ACN.
Key Takeaways
- Business registration depends on the type of business structure. The structure should best suit your organisational goals, amount of initial capital and the level of control you want to maintain.
- As a business, you must register for an ABN (an ACN in the case of a company). To protect the business name and other IP assets, you should also register for trademarks.
- Tax registration and licence registration depend on the business structure you have and the industry you belong to respectively.
- If you want to have an online presence, you will also need to register a domain name that requires an ABN.
While this guide comprehensively covers how you can register for a business, it is best to seek legal counsel to help you navigate legislation and regulations that apply to you.
At Lazarus Legal, our business lawyers have considerable experience helping businesses in meeting their legal obligations. Reach out to us today for any legal advice you require with respect to your business.
You may also like
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.
