6 Critical Legal Requirements You Need to Meet to Start a Business in Australia

Australia was always considered to be one of the most startup-friendly countries in the world. These days, boasting a score of 10.5% of adults engaged in early-stage entrepreneurial activity, and a startup rate of 5.8% this nation still represents one of the most favorable places where you can sharpen your entrepreneurial skills.

Still, no matter how favorable these circumstances may be and how hard you work to get your company off the ground, you will ultimately fail if you don’t make sure the organization is set on strong, crack-free foundations.

In this case, that would mean, checking all the legal requirements and making sure your business abides by all the specific of the Australian law. Let us take a look at a couple of guidelines that should help you along the way.

Determine the type of legal entity

Australian law recognizes numerous different types of business structures. However, depending on your future business model and overall goals, you will most likely choose one of the following three types:

• Sole Trader – This is, by far, the simplest form of business type and at the same time the most inexpensive option you have on the table. However, a sole trader is legally responsible for all liabilities (debts, losses, etc.) of your company. The sole trader pays the tax on all the profits.

• Partnership – This is the most favorable type of you are starting your company with another person. In this case, the partners share liabilities and share profits according to the partnership agreement. This type of entity can receive some tax advantages and needs to have a Tax File Number (TFN).

• Company – In this case, the liabilities are limited only to the company’s assets. Also, all profits are taxed at one tax rate and the organizations are suitable for government grants, incentives, etc. On the other hand, these entities are somewhat harder to set up, need TFN, and entail additional legal and financial reporting.

Take care of the business location

The business address is absolutely necessary for filling in various business forms, so move this issue off the table as soon as possible. Keep in mind, though, that Australia features various regional discrepancies that can make this process considerably harder. Do your best to look out for the local experts familiar with local legislation. If you are, for instance, starting out in the state of Victoria, ask for help from a professional conveyancer in Essendon or some other local business center.

Register for an ABN

If you are unfamiliar with the term, the ABN stands for Australian business number and it describes an 11-digit number that will identify your company in front of the Australian law. Fortunately, this whole process can be completed online in no more than 15 minutes at the address abr.gov.au. Keep in mind, though, that you don’t need to register a business name if you conduct business under your personal name or you are in partnership and conduct a business under a shared name (e.g., Hobbs and Shaw).

Register name and take care of the trademarks

The business name will play an incredibly important role in the future branding of your organization. But, even if you come up with the best name in the world, you won’t get any legal or trademark protection unless you register the business name at asic.gov.au for the price of 34 AUD per year. Of course, the name you choose needs to be unique and not used by any other Australian legal entity. You can easily check availability at the ASIC website we gave you above.

If you want to apply for full trademark (you have the ownership over the name and can control how it’s used by other parties) registration you will need to pay a fee starting at 220 AUD. You can find more information about the process at ipaustralia.gov.au.

Register for taxes

In the Australian lingo, the taxes are usually described by GST (Goods and Services Tax), are handled by the organization called ATO (Australian Taxation Office), and once you complete the registration, you will get a unique identifier called TFN (Tax File Number). The good news is that if your company makes less than 75,000 AUD during a fiscal year you won’t need to register for GST. Like in all other previous cases, the registration can be fully completed online.

Get the necessary company insurance

Last but not least, we would like to remind you that some forms of business insurance are compulsory by Australian law. Of course, the required insurance will vary depending on the type of your business. For, example:

• Workers’ compensation insurance if you have employees

• Third-party personal injury insurance if the company owns vehicles

• Public liability insurance for companies that feature a high level of risks involved

In conclusion

We hope these few examples gave you the shortlist of the legal requirements you absolutely need to meet if you want to start the company in Australia. Of course, launching a company means you will need to cover countless other similar activities. But, if you fail to properly research and address the issues we have listed above, your organization will never be able to take off. That would be too bad since Australia does make an excellent place to start your entrepreneurial journey.