What are the legal considerations when starting a business?
Lets say a budding entrepreneur has an idea
for a start up. It doesn't have to be revolutionary. In fact, there are other
companies running the exact service he/she wants to provide. Its certainly
legal, but does it require a specific license, have to comply with certain
standards, require a certification or qualification?
Where does one find out the answers to such questions?
For example: I can't just stick a sign on top of my car saying taxi and start
offering people a lift around town.
Dj, I think you've answered your own question!
It depends entirely in what business area the idea is based. Financial planners need a license to practice, graphic designers don't. Online retailers need to comply with rules imposed by merchants, banks and PayPal etc., Facebook doesn't.
Some basic research into the idea will quickly reveal the level of compliance needed.
Try: http://www.business.gov.au/BusinessTopics/Registrationandlicences/
Dj, other than the gov site, the three main centres of advice would be: 1. your accountant; 2. your legal advisor; 3. your local council. Or perhaps ask on these kinds of forums – eg. what qualifications and licenses are needed to start an XYZ business? Or simply look at the qualifications of your erstwhile competitors – do all the ABCs on LinkedIn have the same letters after their names, or similar practical experience? You'll get clues whether to look further.
Thanks Steve for your input. I was on that suggested link and as well as a search engine to help you find the answers to your questions (which as I mentioned before can be a little difficult) they also have a phone number for the Fair Trading centre on 13 32 20. Just to keep you updated they referred me to another service, The BAS (BUSINESS ADVISORY SERVICE) and I will be contacting them on 1300 134 359. I shall keep you posted : ) Thanks again. (P.S. Going to have another crack at the search tool on your suggested link, cheers)
Dj, as Steve said, each industry requires different licences and permits. For example, if you are starting a catering business, according to law, you can't just start cooking from your own kitchen. You'll need permits for that. It's important to research what laws and regulations exist on a national as well as on a state level.
Here is a link which may help narrow down what a business may need:
The Australian Business Licence and Information Service
ABLIS helps you find the government licences, permits, approvals, registrations, codes of practice, standards and guidelines you need to know about to meet your compliance responsibilities.
Also, don't forget to register for an A.B.N as without this you will not be able to invoice, as well as to set up the appropriate business structure.
An A.B.N. is enough if you want to trade under your own name, but if you would like to name your business you will need to register that business name.
Thanks so much Gosia, that is the same website I found through using Steve's link. Unfortunately they have proved useless in my particular query which to be fair is quite unique. Of course the reason I may not be able to find anything is because the type of business I was looking at setting up (this is for a client by the way) may not need any licences or permits. I shall press on and keep you all updated. : )
Update #2. After calling the BAS, they were at a loss as to why the contact centre for ABLIS in NSW which is NSW Fair Trading (cause that makes sense) couldn't give me an answer about licenses and permits when that is specifically what they handle. However BAS was extreamely helpful and put me onto a few different options to contact, as well as referring me back to ABLIS. Will try ABLIS again and see if a different operator can help but I also found an industry association for best practise in the correct industry through looking at an existing companies website. So I am definitely on the right track : )
Dj Hodgson, Marketing & Communications Manager, BDM at David Henderson Online
Thanks Steve, I guess that was the point I was trying to make. How does one know whether or not their business is one that does require that sort of 'permission' to operate such as a Financial Advisor, or if they are able to just go ahead and start, like a domestic cleaner? Some businesses are more obvious than others. I was on that very site yesterday and found finding the answers difficult to come by. This is due to the fact that the sheer amount of info is so immense that finding the answers to your unique little query is rather difficult. Having said that I am sure the answers are in there somewhere. It maybe one of those cases where it's quicker to pick up the phone : )