This article outlines the key steps you should take to assess the legal health of your business. Neglecting to address basic legal questions can be very costly.
Moreover, the business and legal environment are constantly changing and developing, so you should undertake a legal health check regularly to ensure you are compliant with the law and protected from liability.
Here are the basic things you should consider:
1. Is my Business Structure right?
Choosing a business structure is an important initial step. Small businesses usually use one of four structures:
i) Sole trader: An individual trading by themselves.
ii) Partnership: An association of people or entities that run a business together – not as a company.
iii) Trust: An entity that holds income or property for the benefit of the owners.
iv) Company: A legal entity that is separate from the owners.
i) Sole trader: An individual trading by themselves.
ii) Partnership: An association of people or entities that run a business together – not as a company.
iii) Trust: An entity that holds income or property for the benefit of the owners.
iv) Company: A legal entity that is separate from the owners.
Each type differs in relation to set-up costs, licencing, taxation, personal liability, and the level of control you will have in the business. You might want to consider questions like – How will I protect my personal assets? How much and how fast do I expect my business to grow? It would be helpful to get legal advice to figure out your best option.
2. Do I have appropriate Risk Management Strategies in place?
Establish a comprehensive risk management plan. Take time to map out trends in the factors that influence your business. It would also be helpful to do some scenario planning to work out how your business would respond to unexpected events. Finally, make sure you have adequate insurance to protect you if anything goes wrong. It is important you understand exactly what your insurance covers and that it meets any third-party requirements your business may be subject to. This will give you peace of mind and could make a world of difference for your financial situation later on.
3. Is my Brand and Intellectual Property protected?
Branding and intellectual property are often the most valuable assets of any business. Make sure you protect it by having all the following points covered where applicable:
- Register your business name, domain name, and social media accounts.
- Register trademarks, patents, logos, designs or copyright disclaimers.
- Secure your web name or URL.
- Own the copyright content of your website.
These steps will protect your brand by giving you exclusive use of the many important aspects which make your business unique. It will protect you from copycats stealing your ideas!
- Register your business name, domain name, and social media accounts.
- Register trademarks, patents, logos, designs or copyright disclaimers.
- Secure your web name or URL.
- Own the copyright content of your website.
These steps will protect your brand by giving you exclusive use of the many important aspects which make your business unique. It will protect you from copycats stealing your ideas!
4. Do I comply with Licence and Permit requirements?
Be aware of what registrations and licences apply to your business. This is often complex as they are handled by different levels of government – local, state/territory, and federal. The Australian Business Licence and Information Service (ABLIS) website is a good starting point to find the licences, permits, registrations, approvals, standards, guidelines and codes of practice you need to comply with.
Katherine Hawes is principal at Digital Age Lawyers. If you have any further questions about your business, please don’t hesitate to contact us or book in for a legal health check up via our website www.digitalagelawyers.com
