Sydun & Co Solicitors

A Step-By-Step Guide for Establishing a Business

Planning to establish a business is the foundational step in the process. However, in addition, you will need to examine several other key factors and answer the following questions: What will your business entity do? Who will be your target market? What will be your business structure? And, what is your revenue generation plan?

Once you get a clear picture of the type of business you’d like to establish, the next step is to decide the best vehicle to operate the business and set it up before you begin operations. Sometimes, establishing a business may become an overwhelming process. However, things will get easier as you prepare a checklist and follow a step-by-step guide.

Establishing and starting your business can be a simple task if you know exactly what you need to do.

In this blog, we will discuss the steps you will need to take to establish your business in Australia. Regardless of the business type you’re venturing into, it is recommended that you hire an experienced business lawyer to guide you through each step of the process.

6 Vital Steps for Establishing Your Business

Prepare a precise business plan

Before registering a business, it is crucial to have a business plan. Accordingly, you will need to do the following:

  • Gather ideas on what you want to do and the purpose of your business
  • Strategies your financial and marketing plans
  • Identify your target market
  • Determine the type of relationships you want to maintain with your business partners

Understanding these key points will help you assess and finalize a business structure that works best for your entrepreneurial idea. In turn, the type of business structure you choose will affect the business establishment process.

Hiring a corporate lawyer in Australia can also help to streamline your business establishment endeavour.

Determine your business structure

Once you have outlined your business plan, it is now necessary to determine your business structure.

In Australia, you will typically find three types of business structures:

  • Sole proprietorship
  • Partnership
  • Company

Moreover, you also have the option to modify the business structure with future expansions. Determining the right structure can play a pivotal role in the success of your business.

While selecting a business structure, it is essential to consider the following factors:

  • The size, value and scale of your business
  • Risk assessment and limiting your potential liability
  • The monetary value of the initial capital and whether you need to raise funds from others
  • The degree of control you want to have as a business owner/founder.  
  • Tax benefits of each type of structure

Legal experts from the best law firms in Australia can guide you in understanding the legal aspects of every business structure.

 Obtain Your Australian Business Number (ABN)

Businesses operating in Australia need to have a mandatory Australian Business Number (ABN) with the Australian Business Register.

The ABN is an 11-digit number that gives a unique Identification to your business, especially for taxation purposes.

Moreover, the ABN number also plays an important role in the following situations:

  • Claim goods and services tax credits
  • Get a domain name to establish your business website and build an online presence.
  • Register for PAYG Withholding

If you plan to operate a business as a sole trader or partnership you need to register your business name as well as have an ABN to clearly identify the legal entity operating the business. If you choose a company structure, you first need to purchase or set up a company which is identified by its CAN. That company then acquires an ABN which number is usually based on the ACN. The ACN comes under the Australian Securities and Investments Commission (ASIC) umbrella. It represents a 9-digit code that helps in company identification and monitoring by the ASIC.

Once you’ve obtained your ACN and/or ABN and established your business structure, you can start your initial business operations.

Protect Your Business Name

When creating your business, it is critical to avoid using a business name that already exists or is being actively used by another entity.

A unique business name will help you to stand apart from your competitors and make an influential impact on your target market.

Your business name should reflect your business/company’s value and reputation built over time. A commercial lawyer can suggest various ways to protect your business.

To check the availability of a particular business name, we recommend visiting the ASIC website. Once you have finalized a business name for your venture, you can protect it from getting copied with two simple steps:

  • Registering it with the ASIC;
  • Registering a trademark

Registering a trademark for your business name ensures you are the exclusive owner of that name. What’s more, anyone else using that name will become liable to face a lawsuit.

 Register Your Taxes

The nature of your business and the business structure will determine your tax obligations. A corporate lawyer in Australia can help you the best in understanding your tax obligations and how to fulfil them.

You’ll need a tax file number (TFN) for your business. As a sole proprietor, you can continue to use your individual TFN. However, if you have registered your business as a partnership or a company, you will need to obtain a separate TFN exclusively for your business.

Business owners usually need to register for the following taxes:

  • Goods and Services Tax (GST)
  • Pay-as-you-go (PAYG) withholding
  • Fringe Benefits Tax (FBT)

Get Your Licences and Permits

Licences and permits give you the power to execute certain activities as a business. Furthermore, these important elements also protect your business in cases of conflicts or legal problems.

Permits and licences can vary depending on the industry, business type, activities, location, and applicable state and local laws. Your legal counsel from the best law firms in Australia can advise you regarding the permits your business will require for smooth operation.

Operations

You then need to look at the terms and conditions on which you operate, any advertising or social media You then need to look at the terms and conditions on which you operate, any advertising or social media presence, setting up a website, privacy considerations, employees, terms of employment, insurance and related matters. The complexity of these depends in part on the type of business, where it trades, what it provides and who is serviced by the business as well as it’s scale and the medium in which you operate (on line or bricks and mortar presence.) All of this is tailored to suit and requires guidance from an experienced business lawyer.

Take Away

While this guide gives a comprehensive step-by-step review of how you can establish and register a business, it is best to seek legal consultation from an established commercial lawyer

to help you navigate legislation and regulations that apply to your business. Hire qualified legal experts to make your journey business establishment journey smooth.

You need to engage one of the best law firms in Australia for this task.

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