Inadvertent breaches of the many laws surrounding small businesses can cost thousands. Knowing what your business may face in terms of legal issues can help to take the right measures to minimise risk and mitigate these potential breaches.
Incorrect Tax Deductions
Trying to handle your tax obligations without the aid of a qualified professional (such as an accountant or bookkeeper) can increase your risk of non-compliance and breaches. An easy way to minimise this risk is to research what your tax obligations will be before you register your business. It is a liability that should be accounted for in your business’s budget, so hiring a professional tax adviser (while an expense to incur) can save your business in the long run.
Licenses
In most industries, there will be a licence that your business will likely need to obtain before trade can legally commence. This is to ensure you have been adequately taught the laws relevant to the industry and that you know how to operate the necessary equipment. If you are not sure if you require a licence, you must check. Having the license is also a great selling point, and you can face heavy fines if you are caught trading without the right one.
Intellectual Property
Before commencing operations, it’s important to properly check that ideas such as your business name, logo, and slogan aren’t already out there. You can search online to see what trademarks have been registered. If there happens to be one similar or the same as what you had in mind, you risk getting into legal trouble for trademark infringement. The lesson here is to register your business’s trademarks early because they will only become more valuable to your business as it grows.
Employment
If you have under 20 employees, you are classified as a small business under Australian law. It can be tempting to hire those employees on an informal basis, but this can lead to issues down the track (particularly with new changes to casual employment in the works).
It is recommended that all employees (even those covered by a Modern Award) should be formalised. An employment contract clarifying the terms of employment, conduct and grounds for termination can be an invaluable asset.
Further, having the right workplace policies will allow you to set out your office procedures. Legal issues for small businesses can arise in relation to an employee’s use of social media, conductor even if your employees smoke at work – so it’s always wise to have documents that cover these.
Choosing a Business Structure
Deciding on what business structure is proper for you can be stressful whether it be a sole trader, partnership, company or trust. Each comes with its own set of tax and legal obligations. The circumstances of your business can also change, causing you to shift structures as it grows bigger. If your business is growing, reflecting on your current business structure and its benefits to you is a must.
Stay ahead of the game and steer clear of these common legal issues by contacting a lawyer to ensure your business is protected.