Going into business

Published 08 Jul 2015
Louis Andreatta

There are many things you should think about before going into business such as:

• Deciding the best structure for your business. Should it be either:

(a) Sole trader

(b) Partnership

(c) Limited liability company

(d) A trust

• Obtaining an Australian Business Number (ABN) from the Australian Taxation Office (ATO).

• If your income or turnover exceeds the requisite threshold, you will need to register for GST with the ATO which means it will be necessary for the business to complete a Business Activity Statement (BAS) at the end of each quarter and lodge the statement with the ATO as well as paying your GST liability to the ATO.

• You will need to register a business name with the Department of Fair Trading.

• You may need to get development approval from council to operate your business from the premises it will occupy.

• You may need to enter into a lease of premises the business intends to occupy. If you are buying an existing business which is under an existing lease, the landlord must consent to the assignment of the lease to any purchaser of the existing business.

• You may need to decide whether or not you should start a franchise business. This will require you to carefully read and understand the franchise documents so that you know your rights and responsibilities and so that you are in the position to know whether the franchise agreement works in your best interest.

• You may need to be the holder of the license or permit required by law to operate the business.

• If the business will employ workers, you must by law take out workers compensation insurance.

• Prudently, if you consider taking out other non-compulsory insurance such as public liability insurance, business interruption insurance etc.

• If you are buying an existing business with employees, you should negotiate who will bear the cost of accrued staff entitlements such as annual leave, sick pay or long service leave and factor these matters into the sale of purchase price.

• If you are buying an existing business, the price may include an amount for goodwill. Goodwill is essentially the price you pay for future earnings of the business. It's the price of the unseen or what it's worth beyond the value of the assets of the business. Things like location, reputation, the quality of the staff it employs or its intellectual property.

Maclarens Lawyers can assist you if you are buying, selling, starting or running a business

Maclarens Lawyers can assist you by:

• Advising you on the best structure for your business

• Drawing or reviewing partnership agreements

• Setting up a company

• Setting up a trust

• Reviewing lease agreements regarding premises

• Arranging for an Assignment of Lease from the vendor to you

• Explaining your rights and obligations under a franchise agreement

• Carefully appearing and advising you on the terms of the contract of purchase of business

• Helping you estimate the true value of the goodwill of the business

• Advising you on your obligations to employees

• Assisting you with matters such as business name registration, trademark registration and protection of intellectual property

• Advising you as to your obligations to obtain an ABN and to register for GST