Starting and running a business successfully requires more than just a great idea and a solid business plan; it also requires a strong legal foundation. Without key legal documents in place, even the most promising business can face unnecessary risks, disputes, or even shutdowns. If you are starting up or merely tidying up, this blog will help you understand what you can do for your business to build a strong legal backbone.
Join Emma on her journey to build a legally sound foundation for her business
Emma has recently resigned for her job and is ready for the next big step – starting her own recruitment business in Adelaide. Emma wants to make sure that she has all her legal bases covered to avoid any complications later down the line.
Here’s what she (and every business owner) needs to achieve this goal:
1. Business structure documentation
Having the correct business structure documentation in place is essential for any business, as it formally establishes the entity that the business is run through. As a business owner, you must be aware of and comply with the individual requirements for your business. These can vary between legal structures such as sole trader, partnership, company, and trust.
After reading our article titled ‘I’m a ‘start-up’. How should I set up my new business?’ Emma has decided to incorporate her business and utilise a company. Setting up a company in Australia requires a lot of paperwork, so she will need to take several steps and implement a range of documents, including:
- Obtaining a Directors Identification Number;
- Incorporating a company and obtaining an ASIC Certificate of Registration;
- Adopting a Company Constitution for the company; and
- Applying for an Australian Business Number (ABN), and Tax File Number (TFN).
If Emma had chosen a different structure, for example a trust, the documents required would be different. The start-up stage is the perfect time for Emma to seek professional advice to ensure that the structure she is setting up is best suited to her needs. Emma should engage a lawyer, accountant and financial advisor to assist her with making these impotant decisions.
Identifying and preparing the right documents can be confusing. Call us on 1300 654 590 or email us if you want to simplify this process.
2. Lease agreements
Whether you’re starting up a retail store, opening an office, or moving into a warehouse, one document is key: the lease agreement. The lease agreement should clearly outline the terms of occupancy, as well as the rights and responsibilities of both parties to prevent disputes, unexpected costs, and instability.
Emma is looking to rent an office space to run her business. It is important that when Emma selects an office, she ensures that a lease agreement is in place and carefully reviews it. It is equally important that she fully understands her rights and obligations under the lease to avoid any complications and to ensure that the property is suitable for her use.
Key things that Emma should look out for in her lease include:
- The term of the lease – if the term is more than a couple of years, Emma could be locked in to an expensive longer-term obligation even if her business doesn’t succeed.
- Renewal rights – Emma may like to consider securing a shorter lease term with multiple renewal rights. That will give her the opportunity to opt in to renewing her lease for a further term. Emma will need to make sure she takes note of the requirements to exercise her option to renew, such as the timing around exercising the option and whether a particular notice is required.
- Rent and outgoings – Emma should check whether outgoings are included or excluded in the rent and get an idea of what these look like on a regular basis. The more amenities the property has, the more expensive her outgoings are likely to be. Emma should take note of rental obligations and ensure she has a business plan in place that accommodates regular rent payments.
- Rent reviews – Emma should carefully review the rent review provisions under the lease and make sure that they are appropriate for the market conditions in the area she is leasing in. She should also take into account the rent renewal that will be applied in the event that she exercises an option under her lease, as this often uses a different review mechanism to an annual rent review.
- Security and guarantees – Emma’s landlord will likely require that a bond is paid or a bank guarantee is issued in the amount of at least 3 months’ rent in the landlord’s favour, as security for Emma’s obligations under the lease. Bank guarantees are more common in commercial leases, so Emma will need to liaise with her bank to arrange for the bank guarantee to be drawn up.
We can review your lease and assist you in clearly understanding your rights and obligations. Call us on 1300 654 590 or email us to ensure your lease protects your interests.
3. Employment contracts
Employment contracts are essential legal documents for any business that employs workers. An employment contract ensures rights and obligations between the employee and employer are clear and can help ensure that the business is protected and the risk of disputes is reduced.
Emma’s business will hopefully thrive and in a couple of years, she may be ready to take on her first employee. As the owner of a recruitment business, Emma will know how important it is that she carefully considers which types of workers will be most suitable for her team, including employees, casual workers, independent contractors or commission-based employees and make sure she has the right agreements in place. Employment contracts form part of a suite of workplace related documents, including policies and codes of conduct, that will help Emma deal with the challenges of being an employer.
In addition to having these contracts in place, it’s equally important that business owners fully understand their obligations as an employer under Modern Awards, including pay, leave and superannuation entitlements.
We can help you determine and execute the employment contracts that will best set up your business for success. Call us on 1300 654 590 or email us to discuss how we can help you set up for success.
4. Intellectual property protection
Intellectual property (IP) protection is a vital but often overlooked aspect of running a business. Whether it’s a brand name, logo, product design, or proprietary process, your IP will represent some of your most valuable business assets. Without legal protections in place, these assets are vulnerable.
Emma should obtain some advice about the the IP relating to her business that needs to be protected. To begin with, she may like to apply for a trademark in relation to her business name, logo and domain. Later on, she may consider an asset protection strategy for any IP she creates through her business. Emma should also ensure that if her employees ‘walk out the door’ they don’t take ‘IP’ with them by impementing clear clauses in employment contracts relating to ownership of IP and work products.
IP protection isn’t a one size fits all solution. Call us on 1300 654 590 or email us to learn how we can help you identify and implement the strategy to protect your IP.
5. Trading terms
Trading terms are fundamental to the effective operations of any business when engaging with customers or clients. These agreements set out each party’s rights, responsibilities, and expectations in relation to the engagement, which will help avoid any misunderstandings and reduce the risk of disputes. Not least, they will assist you to get paid.
To ensure Emma is paid for her efforts, she should implement well-drafted trading terms with any clients engaging her business to source talent. These agreements should document the scope of services, fee structure and limit her liability. Importantly, the terms should set out clear payment terms to ensure Emma gets paid on time and can pursue unpaid invoices without hesitation.
Don’t leave your trading terms to the last minute. Call us on 1300 654 590 or email us to put in place comprehensive terms that protect your interests.
6. Insurance policies
Insurance policies are essential for every business owner, as they play a crucial role in safeguarding the long-term success and sustainability of businesses by protecting against the unpredictable and unforeseen. Often, insurance policies are not just a safety net for businesses, they are also a legal requirement. Some businesses must obtain particular insurances depending on their industry. The legal insurance requirements will largely depend on the business and industry.
For Emma’s recruitment agency, the core insurance policies she should consider include professional indemnity insurance, public liability insurance, workers’ compensation insurance, and cyber insurance. Emma shouldn’t forget director’s insurance – in Australia there are over 700 laws that make directors personally liable for an act, omission or obligation of the company.
Emma should consider engaging an insurance broker to assist her with identifying any other insurances she may require, and to assist her with applications.
7. Personal and business succession plan
Sometime down the track, Emma might bring family members into the business or plan for a key employee to take the reins. At that time, Emma will need a business succession plan. A well-structured succession plan will ensure that there is a clear plan and process to transfer ownership and leadership responsibilities in the business, minimising uncertainty and safeguarding the business’s operations, employees, and value. Planning ahead can also minimise disputes.
If Emma brings on a business partner, they may consider implementing a buy-sell agreement, so that an agreed plan is in place for one business partner to buy out the other’s share in the event of one business partner’s death or incapacity. While Emma is the sole controller of the company, she may consider putting in place a company power of attorney so that someone is able to step up and run the company in the event of her untimely death or incapacity.
While Emma is just starting her recruitment business and business succession seems like a far away consideration, Emma should ensure her personal affairs are in order and establish a comprehensive succession plan that includes a Will, a power of attorney and a medical guardianship directive (which in SA would be an Advance Care Directive). It is never too early to think about personal estate planning and the creation of Emma’s new business is the perfect opportunity for her to get her personal affairs in order.
We can help you put in place a comprehensive estate plan or business succession plan to leave a legacy, not a mess. Call us on 1300 654 590 or email us to start these important conversations.
8. Business licences and permits
Every business owner must ensure that they have all the necessary licences and permits before commencing operations. Licences and permits will apply at local, state and federal levels, and will vary from business to business. What is required depends on the nature of the business, the location from which it operates and the types of business activities it undertakes. Securing the right licenses and permits is critical to avoid fines, legal issues, or disruptions to your business.
Emma is based in Adelaide. For Emma, securing an employment agent licence from SafeWork SA will be critical to the successful establishment of her recruitment business.
If Emma was based in a different location, or if she eventually expands her business to other jurisdictions, she will need to consider local licencing and permit requirements.
Licensing and permits can be tricky to navigate. Call us on 1300 654 590 or email us if you want clear guidance on these requirements.
9. Record keeping and good governance
Having record keeping documents in place is essential for running a successful and legally compliant business. Maintaining accurate and organised records is crucial, not only for day-to-day operations, but also for meeting legal, tax, accounting, and regulatory obligations.
Emma will need to ensure that she retains business records, such as invoices, receipts, employee records, and financial statements, for at least five years to comply with the Australian Taxation Office’s requirements.
Emma should also be aware of the privacy laws surrounding the keeping of personal information she stores about her employees and clients and ensure that she has appropriate cyber security measures in place to protect highly sensitive data.
Maintaining clear records of all documentation relating to the business is a form of good governance. Keeping meticulous records and ensuring all information is current and up-to-date will put Emma in a good position in terms of due diligence that someone may want to conduct on her business – this might arise when Emma applies for her first bank loan to expand the business, if Emma wants to attract investors or business partners, or if Emma ever wants to sell her business one day.
Good record keeping is a critical part of good governance. Call us on 1300 654 590 or email us if you want practical advice on how you can set your business up for success.
How we can help
Whether you’re starting up a business like Emma, or are looking to strengthen your existing business, ensuring you have considered each of these points now will save time, money, and stress in the future. Don’t leave your success to chance – seize the opportunity to optimise your business potential!
We would love to talk to you about setting up your business up for long-term success. Call us on 1300 654 590 or email us today to talk to a lawyer about how we can help you.
The information contained in this post is current at the date of editing – 9 October 2025.
