New year, new startup?
If you’re thinking of launching a startup in Australia in 2024, there are many things to consider to get you off the ground and running with the best chance of success.
An area often overlooked is legally protecting your startup and ideally this is done from the beginning.
Here are some tips on how to do that as a startup:
When you decide on a structure for your business, choose the one that best suits your business needs. Consider each option carefully as there are key factors and rules to consider for each structure.
The four most common types of business structures are:⠀
SOLE TRADER – the simplest structure, gives you full control⠀
COMPANY – more complex, limits your liability because it’s a separate legal entity⠀
PARTNERSHIP – made up of two or more people who distribute income or losses⠀
TRUST – where a trustee is responsible for business operations⠀
Your business structure can determine:⠀
+ The license you require⠀
+ How much tax you pay⠀
+ Whether you’re considered an employee, or the owner of the business⠀
+ Your potential personal liability⠀
+ How much control you have over the business⠀
+ Ongoing costs and volume of paper work for your business⠀
You can change your business structure throughout the life of your business. As your business grows and expands, you may decide to move to a different type of business structure.⠀
Business.gov.au is a fantastic resource for business owners which explains all the different business structure types in detail. Head here for more information on planning your business structure.
Before deciding which business structure to use or for re-structuring your existing business, seeking professional advice can help. You can use a business adviser, accountant or commercial lawyer.
For more detail, read our blog article on the 4x main types of business structures here.
Consider what legal documents you may need. These can include (but are not limited to):
Organisational documents – dependent on the type of business structure you operate with, it’s always a good idea to maintain excellent record keeping.
A founders/co-founders agreement that defines the roles and responsibilities of each founding team member. Ensure equity/vesting ownership as well as IP ownership is covered. It can also cover business operations, shareholders/shares, company directors, and transfer or sale clauses.
Contracts – a number of contracts for various situations. You should have one for each business relationship you have and anyone you hire to assist with your business whether as an independent contractor or employee. Check out our blog article on the difference between an employee and independent contractor: https://littonlegal.com.au/blog/the-difference-between-an-employee-and-an-independent-contractor/
Business licenses, permits & registrations – specific to your type of business and State/Territory laws.
Non-Disclosure Agreements – all businesses have information they want to keep private and should consider NDAs when dealing with employees, contractors, business partners, service providers, etc.
Terms & Conditions and Privacy Policies – crucial in the modern, online world of business!
Get intellectual property locked down – founders and investors need to feel confident that a company owns the intellectual property rights for its operations. Intellectual property rights can impact significantly on the value of a company.
Registering a trade mark for the company’s name and logo is a good place to start and depending on your business, there may be other IP registrations to consider, including internationally.
Check out our blog article on registering a trade mark for your business here.
The different types of IP include:
Trade Marks – protects logos, words and other branding
Patents – protects inventions and new processes
Copyright – protects art, writing, music, film and computer programs
Registered Designs – protects the visual design of a product
Circuit Layout Rights – protects layout designs or plans of integrated circuits used in computer-generated designs
Plant Breeders Rights – protects the commercial rights of new plant varieties
We Can Help
Our interest in new business offers enormous opportunity to provide insight and our ongoing expertise from the beginning. ⠀
Establishing a strong relationship that offers the support and guidance while minimising future issues, reducing risk and boosting opportunities for growth and success. ⠀
We recognise that no matter what industry you’re in you will require advice and support in three fundamental areas:⠀
Our significant experience of major corporate and commercial transactions, including those with an international element, we can guide you on how to get the best deal possible for now and in the future. We set our clients up in the beginning with the view of ‘what success’ means and looks like in their market place, providing the framework to back themselves. ⠀
We understand ever changing business environments from compliance to digital and global trends; the fast pace at which you need to manage your business. We are here to provide innovative and effective advice to ensure your business is ready for the next opportunity. ⠀
We help you to manage your risk and to make sure that your corporate reputation is protected from the inside out; from your brand elements to company structure. We know what it takes to protect a business and the people behind it.
Contact our friendly team here to see how we can help your startup.