also involves following rules and regulations, some of which you may not have initially considered. In order to prevent you from getting into hot water before you have even started, keep reading to learn about the laws of starting a business.
What should I do first?
The first thing you need to do when setting up a new business is to apply for an ABN and register a business name, both of which can be easily done online. However, lots of people are unsure about if they need a business plan to do this or not. Although you don’t need any formal business plan, when applying for an ABN and business name registration you will be asked to give details about your new venture, and much of this information would be included in a business plan. Some things you will be asked to provide are:
- Details of business activities
- Business structure
- Proposed business name
- Address and contact details of the business
- Details of each person associated with the business
Do I Need to be Registered?
The simple answer to this question is yes. It is really important to keep your business structure up to date. If you fail to register your business name you are not complying with legislative requirements and your business can face serious penalties. On top of this, you could begin to operate under a name that is already in use- this can cause problems with the current business using that name and you could face being sued.
Sole Trader Vs Company?
One of the first things you need to decide when starting a business is what business structure you want to operate under; the two main structures are a sole trader or a company. A sole trader is a person trading as the individual legally responsible for all aspects of the business, whereas a company is a separate legal entity and the company owners are not generally liable for company debts. A company is a more complex business structure and involves higher set up and running costs than a sole trader. What business structure you decide on depends on the type of business you are running, how many employees you have and how much money the business makes.
What taxes do I need to register for?
The type of taxes you register for will depend on which business structure you operate under, what type of business you are running, and how much you are earning. You may need to register for taxes such as GST and PAYGW (pay as you go withholding) It’s also important to remember that if you are a sole trader you will be taxed as an individual but companies are taxed as a separate entity.
Obviously these points are just the tip of the iceberg when it comes to what you need to start a business, but they will definitely give you a head start out the gate! So, are you ready to take on the world with your new venture?