On the cusp of starting your own business? Don’t forget your business legals!
From setting up your business, to the finer details of having contracts in place, we’ll take you through what you need to know.
Choose Your Business Structure
Setting up the correct business structure and all its associated documents from the beginning will provide a solid sense of direction for your business. We’ve written about the three most common business structures—sole trader, company and partnership structures—here.
Briefly, the structure you choose will depend on how much you envision your business growing, the value of your business, how risky your business activities are, whether you’re going into business alone or with others, and what type of industry you’re in.
If you’re not sure what structure is best, you can reach out to Sprintlaw for a Corporate Consultation with one of our lawyers.
What Documents Will I Need For Setting Up My Small Business?
If you are the sole owner of the business, are undertaking low risk activities and don’t have a huge budget, you might consider becoming a sole trader. To become a sole trader, you need to notify HMRC that you will be handling all your taxes yourself.
A sole trader is like being self-employed, so while it’s simple to set up, it means you’re personally responsible for everything in the business. As such, you want to keep an accurate record of all your documents in case anything goes wrong.
The downside of being a sole trader is that your business’ liability won’t be separated from your personal liability, meaning you could be held responsible if something goes wrong. To protect yourself in this case, the most important documents you’ll need are well-drafted contracts between you and your customers, and insurance.
Get Contracts In Place Between Your Business And Your Customers
Regardless of your business structure, the next step to starting a small business is to have the right contracts in place.
The type of contract you’ll need will depend on the type of business you’re running. For example, if you’re running an online clothing store, you would have a contract between you and the customer in the form of Online Shop T&Cs—covering things like delivery, payment, and returns.
If you’re running a physical clothing store, on the other hand, you wouldn’t need contracts with your customers, however you would still need contracts with your suppliers.
We have experience in drafting contracts for small businesses in a diverse range of industries, including Hire Agreements, Service Agreements, Gym T&Cs, Recruitment T&Cs, Graphic Design T&Cs, and much more.
Why Have A Contract With My Customers?
The main benefits we’ve seen from small businesses having contracts in place with their customers are:
- You’re more likely to be paid, and on time
- Your intellectual property has an added layer of protection
- The contract can clearly explain the scope of work, and make provision for more payment if more work needs to be done
- Disputes between customers and your business can be avoided
- Your business’ liability is limited
- Your business is more likely to comply with the relevant law, for example, the Australian Consumer Law, by only having fair contract terms
Have Contracts With Your Business’ Suppliers
Having strong relationships with other businesses, such as suppliers, that you rely upon is important for the success of your enterprise.
Some benefits of contractualising your relationships with other businesses are:
- Greater reliability and therefore continuity in the goods or services your provide
- You’ll have recourse to other options if there is a problem with supply
- Payment terms are clear
- Both parties will understand if your agreement is exclusive or not
What Other Documents Might I Need?
Not sure whether you’re using contractors or employees? We’re here to help, and can organise a consultation with a lawyer to explain this to you.
Need On-Going Legal Help?
Throughout your business, you might want amendments made as your business changes, or if the law changes.
You may wish to consider becoming a Sprintlaw Member to access free contract amendments, and free phone consults with lawyers for any questions that come up as you’re setting up your business.
First up, Sprintlaw’s ethos is to make legals accessible to small businesses. We also believe it’s important you and your customers understand your contracts, so we’ll draft your business legals in accessible, clear language.
Being able to plan your budget when starting a small business is super important. At Sprintlaw, we charge fixed-fee upfront costs, so there will be no unexpected bills.
So, what do you actually get from us? We don’t just send you a template agreement that doesn’t reflect your business. Our lawyers will chat to you before starting work on your contract, so that they can tailor it to the specific needs of your business.
This will also give you a chance to discuss any questions or amendments you would like to be made after the contract has been drafted.
In many cases, you’ll also want reusable contracts for your suppliers, employees, customers, and anyone else you deal with. After all, it’s a pain to redraft your contracts for every person you need with.
We can draft contracts with a cover sheet and walk you through how to adjust the contract to fit the needs of each customer, so you can get real value out of your contracts.
To talk you through what legals are a priority for your small business, get in touch for a free, no-obligations consultation on 08081347754 or at [email protected].
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