Regulatory Requirements of Starting a Business
There are not as many regulatory requirements as you may think when starting your own business. A lot simply have to do with ensuring you are properly registered, and many others will depend on the type of business structure you choose to utilise. Then, there are some that may be specific to your particular industry.
We can take care of most of these registrations for you, however you may choose to do them yourself using the following information as a checklist.
1. Register your company
Companies need to be registered with the Australian Securities and Investments Commissions (ASIC). ASIC will give you a form to fill in, application fees apply. You will then be issued an Australian Company Number (ACN) and you will need to pay ASIC an annual fee to renew the registration. You can trade Australia wide using this company name.
If you want to use a different name to trade under, you will need to register a separate business name, referred to as a trading name…
2. Register your business/trading name
If you want to trade using a name other than your entities legal name, you can register a separate business name with ASIC. This trading name needs to be linked to your ABN.
3. Register your business as a trade mark
This is not compulsory but may be considered if you want legal ownership rights to your business name Australia wide. Registration of a business/trading name does not give you any proprietary rights over that name, only a trade mark can give you that kind of protection. You may wish to ensure you have exclusive use of your name now and in the future throughout Australia by registering a trade mark.
4. Register a Domain Name
If you register a domain name at this stage you can either develop a website before you open your business or down the track once you have your business up and running. For further information visit Australian Domain Name Administrator.
5. Register for an ABN, TFN and GST
You will need to apply for an ABN; this can be done via the Australian Business Register, or when registering your business name, as in point 2 above.
Sole traders will use their personal Tax File Number (TFN) and will report both business and personal dealings annually, on the one tax return. However, partnerships, companies and trusts need their own TFN. You can obtain a TFN at the same time as your ABN, using the same application form, available at Australian Business Register. Sole traders need an ABN in addition to their TFN.
You will need to register for goods and services tax (GST) if you anticipate your annual turnover to be greater than $75,000. You can register for GST at the same time you apply for your ABN and TFN at the Australian Business Register. After you have registered for GST, you will be required to lodge a Business Activity Statement (BAS) with the Australian Taxation Office (ATO) on a quarterly basis. You can elect to either have these Statements sent directly to you and prepare them yourself or you can elect for a tax agent to receive them on your behalf.
6. Register for PAYG withholding
If you are going to have employees, you will need to register for PAYG withholding, as it is a requirement that you withhold tax on their behalf when paying wages. You may also have to withhold tax from payments made to contract workers.
You need to:
- register for PAYG withholding; either at the same time as applying for your ABN and TFN, or at a later date with the ATO
- calculate how much to withhold from wages/contractor payments
- report and pay the withheld amounts to the ATO in your quarterly BAS and report the wages in your annual tax return
The ATO website offers detailed instructions about PAYG withholding for employers and has an online calculator for assisting with calculating the amount to be withheld for each employee.
If you are a sole trader or a partner of a partnership, without employees, you will not need to register for PAYG withholding. This is because you will ‘draw’ money from the business to live on, but this is not considered a wage or salary.
7. Register for Workcover
If you have employers you need to take out a workcover insurance policy. The requirements vary from state to state/territory, the links are listed below:
8. Industry Specific Registrations
Depending on the industry your business operates in, there may be further registrations necessary. Most industries require registration with their governing bodies to regulate the industry and ensure operators are qualified and/or certified.