Published on 23/10/2020 by Any Business.Com.Au

Top 5 Legal Considerations for Buying and Running a Business

When starting or buying a new business or franchise, it's important you understand all your legal requirements as a business owner to ensure the set up or change over runs smoothly, and to keep your business covered in the future.

From leasing agreements, business contracts, employee relations and intellectual property, there's a range of legal requirements you'll need to consider, and forms you may need to fill out.

A good lawyer or business advisor will be your best friend in the early stages of your new business; we recommend you consult one regularly to keep everything in check.

But it's also essential that you fully understand your legal requirements without the help of lawyer, so to get you started we've put together our top 5 legal considerations for your business.

1. Competition and Consumer Act

As a business owner you and your business are subject to the rules and regulations of the Competition and Consumer Act (2010) (CCA), so it's important that you read and understand it. It may be long and wordy, but the CCA is designed to promote competition and fair trading, as well as include provisions for consumer protections. The CCA prohibits anti-competitive conduct to protect business competition in Australia, with each state or territory having mirroring competitive provisions which your business will be subject to.

The CCA includes The Australian Consumer Law (ACL), a series of laws that prevent business from using misleading and deceptive conduct and outline safety standards.

Every business across Australia must comply with the laws in the ACL so it's important you know your responsibilities as a business owner and understand legal business conduct. If you're worried a possible business practice may flout the CCA and ACL, consult a lawyer. Don't take it for granted that it's legal; it could damage you and your business in the future.

2. National Employment Standards and Work Health and Safety

If you plan to hire employees to work for your business, you'll have to know and adhere to the National Employment Standards (NES). The standards set out in the NES must be upheld in any employment contract or agreement you make.

These standards include provisions for maximum hours worked, paid leave, notice of termination and flexible working arrangements. The NES applies to all part-time and full-time workers, and in some areas, casual employment contracts. If a casual employee has been employed ongoing for 12 months, there are further requirements for employers under the NES.

Once you have employees in your business, you're responsible for guaranteeing their health and safety while they're at work. The Work Health and Safety Act (2011) outlines your responsibilities as an employer to keep your staff safe at work. But it's also essential you look at your state's work health and safety regulations.

Each state has an appointed body responsible for regulating and monitoring your business's occupational health and safety standards. They can make unannounced visits to your work place to do a safety audit. There are significant penalties for continuous breaches of your state's health and safety laws, ranging into the millions of dollars for severe offences. So it's better to be safe than sorry!

3. Leases and Property

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When looking for a place to run your business, it's likely you'll rent rather than own the property that your business is conducted out of, particularly if you're in retail or working from an office.

A lease is a legally binding contract between you and a landlord which allows you to occupy a premises and usually informs your rights, obligations and liabilities, how you can use your space and how long you must stay.

It's essential you completely understand all of the terms set out by the landlord before you sign the lease. Read the document from front to back to ensure there are no surprises. Once you've signed a lease you're legally liable for adhering to the conditions set out by your landlord. Meanwhile your landlord must also uphold the promises made to you in the lease.

Each state and territory has different requirements and regulations regarding commercial leases. To ensure you're protected and not entering into an unfair agreement, we recommend you have a lawyer read over the lease. Getting out of a lease you're unhappy with is an expensive and time-consuming process, and will come at a huge cost to you and your business.

The Department of Innovation has put together this handy guide about retail leasing which we highly recommend for anyone either looking to lease a property for business, or buying a business with a pre-arranged lease.

4. Intellectual Property

Intellectual Property (IP) comes in a number of forms, from logo designs to invention ideas that need to be protected and managed by the business. Well-managed IP allows a business to differentiate itself on the market; it can be a key difference between a successful business and a failure.

Your IP starts with your business name, which you generally need to register with ASIC. To protect your brand, you may also wish to register your business name as a trademark, to give you legal ownership of the name. That means no other business can use your brand identifiers in the future.

You should also check to ensure the business name you plan to run your business under isn't already someone else's trademark. If you use a registered name or logo and provide similar goods or services there could be legal implications for your business.

If your business has created an innovative device, substance or method new to the market, you should consider registering for patent protection to safeguard your ideas from use by others in the same market. IP Australia provides you with all the relevant information for your business, and is the place to go to register and protect your intellectual property.

You should also consider Australian Copyright Law in a number of business practices, since you may be breaching someone else's copyright if you are using their photos or music in promotional activities, on your website or on your property.

5. Legal Documents, Licences and Registrations

Unfortunately not everything about running a business is fun and exciting, and while you're getting stuck into planning your marketing strategies, merchandising your store, or coming up with creative business ideas, you also need to set aside some time for the boring stuff.

Before you start operating your business, you'll need to ensure you've applied and been approved for the appropriate licences and registrations. Without them you'll be legally unable to run your business or partake in particular activities.

The Australian Business Licence and Information Service (ABLIS) is an invaluable resource to find out which licenses you need to operate your business in your state. We also recommend you have a lawyer advise you on those licences needed so all your bases are covered.

Once you're operating you may need legal documents relevant to your industry. These include service or distribution agreements between you and your clients, or even software licences you may obtain from the providers of computer programs you use in your business. Again, check with your lawyer exactly what legal documents you'll need throughout your business operations to protect you in the long run.

Being a business owner is an incredibly rewarding, exciting and challenging way to make a living – it allows you to explore your passions and be your own boss. But as a business owner you're responsible for many things, including ensuring your business complies with legal standards.

If you're new to the world of business ownership, we can't say it enough – consult a good lawyer and make sure you have all your bases covered. And while it may be boring and time-consuming, read all the relevant policies and information you can find. It'll be worth it in the long run.

AnyBusiness.com.au

Mary is the founder of AnyBusiness.com.au. She has a degree in Business from Monash University and been helping showcase businesses for sale for over 10 years. In the course of running her own business and working daily with business owners and brokers she has developed a keen sense of the Australian market for businesses for sale and shares her knowledge on this blog and others such as female.com.au

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