Running a small business is exciting, but it also comes with legal responsibilities that are easy to overlook when you are busy serving customers, paying staff, chasing invoices and growing the business.
The good news is that many legal risks can be reduced by doing a simple health check from time to time. This article is general information only and should not be taken as legal advice. If anything feels unclear, high-risk or business-critical, speak with a qualified legal adviser.
- Check your business structure
Start by reviewing whether your current structure still suits your business. Many businesses begin as sole traders, but as they grow, take on staff, sign bigger contracts or build assets, another structure may be more appropriate. Your structure can affect control, tax, liability, succession and how easy it is to sell or bring in partners. The Australian Government notes that business structure is a key decision and may need to change as your business changes. - Check your registrations, licences and permits
Make sure your ABN, business name, GST registration, industry licences, council permits and other approvals are current. This is especially important if you have moved premises, added services, started selling online, changed staff roles or entered a regulated industry. The Australian Business Licence and Information Service helps businesses identify licences, permits, approvals and regulations that may apply. - Check your contracts and terms of trade
Your contracts should clearly explain what you provide, what the customer pays, when payment is due, what happens if work is delayed, how disputes are handled and when either party can end the agreement. Avoid relying on handshake deals or old templates copied from another business. Also be careful with unfair or one-sided terms, especially in standard-form contracts. The ACCC small business toolkit highlights the importance of understanding fair competition, contracts and consumer law responsibilities. - Check your employment obligations
If you employ people, review employment contracts, pay rates, awards, leave, superannuation, timesheets, policies and workplace safety obligations. Casual, part-time, full-time and contractor arrangements should be correctly documented. The National Employment Standards set minimum employment entitlements for employees, and the Fair Work Ombudsman provides guidance for small business owners on Fair Work Act obligations. - Check your customer promises and refund policies
Your website, quotes, brochures, social media posts and sales conversations all matter. Claims about pricing, guarantees, outcomes, warranties and delivery times should be accurate and not misleading. Under Australian Consumer Law, consumer guarantees apply automatically when businesses sell goods or services, and businesses cannot take away refund or replacement rights for faulty products or services by relying on “no refund” policies. - Check your privacy and data protection
Even small businesses collect personal information: names, emails, phone numbers, addresses, payment details, employee records and sometimes sensitive information. The Privacy Act does not cover every small business, but some are covered, including certain health-related and personal-information businesses. If the Privacy Act applies, eligible data breaches that are likely to cause serious harm may need to be reported to affected individuals and the OAIC. - Check your intellectual property
Your business name, logo, tagline, designs, website content, systems, photographs and product ideas may be valuable assets. Registering a business name is not the same as owning a trade mark. IP Australia explains that a trade mark can legally protect a business’s unique brand, product name or service identity and help customers distinguish it from competitors.
When should you seek legal advice?
Seek legal advice before signing a major lease, buying or selling a business, taking on investors, hiring senior staff, terminating employees, responding to a dispute, receiving a legal letter, dealing with a privacy breach, changing ownership, entering a large contract or launching a new product with potential liability. Legal advice is not just for when something goes wrong. Used early, it can help protect your business, reduce stress and give you more confidence to grow.
If this article has inspired you to think about your unique situation and, more importantly, what you and your family are going through right now, please get in touch with your advice professional.
This information does not consider any person’s objectives, financial situation, or needs. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation, or needs.
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Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Please consider whether the information is appropriate to your circumstance before acting on it and, where appropriate, seek professional advice.