Business Startup Checklist Australia

There are so many different things to consider when starting a business. In fact, many budding entrepreneurs get overwhelmed before they’ve even gotten their new business running! 

When there’s more than a few things to keep track of, it helps to have some sort of guidance. That’s why we’ve compiled a list of 12 basic steps when starting a business to help get you moving in the right direction. 

1. Get A Business Plan

The first step to any great business is the business plan. It’s good to have all your ideas, research and plans in one place. There is no definitive structure or length for a business plan, however, many like to include the following: 

• An executive summary
• Market research 
• Equipment or tools
• Notes on competition 
• Sales and advertising 
• Financial information
• Description of the products and services
• Management 

While a business plan is not a legally binding document, it becomes an important blueprint and a way for you to map out your business journey moving forward. 

It can help you set realistic goals and milestones, which will then help your business activities run smoothly and according to plan. 

2. Get Funding For Your Startup

You’ll need to be clear on how your business will be funded. Will you be using your own savings? Maybe you’re planning on using investors? What about allocating shares? 

Some startups choose to engage in crowdfunding, which is where you reach out to a pool of retail investors. They provide funding in exchange for ownership in the company. 

Whichever path you decide to take to fund your business, it’s important to have a clear idea, back up plans and room for unexpected additional expenses. 

3. Register Your Startup

Registering your business is one of the first things you should do as you will need your New Zealand Business Number (NZBN) with most of your legal documents in the future. Your NZBN is the official way of identifying your business for tax purposes.

Registering your business can be done online – you just need to fill out the relevant information and submit the form. If the application is approved, you will be notified by email and receive your NZBN.    

Which Business Structure Should You Choose?

When registering your business, you should have the structure of your business sorted first. Your registration process will depend on this key factor. 

The registration process involves applying for the kinds of taxes that will apply to your business which could be impacted by the structure you choose. 

Your structure will also determine which documents you’ll need to have drafted. For instance, companies need to have a Company Constitution (or use the replaceable rules found in the Companies Act 1993 as an alternative). 

4. Hire Employees For Your Startup

Getting the right staff to help you run your startup is also something you might consider. Having employees is a big help, but it also means you will have the additional responsibilities as an employer (more on this below). 

It’s best to talk to an Employment Lawyer to gain professional advice on your legal obligations towards any potential employees. 

5. Get The Right Licence And Qualifications

Depending on the industry you are in, you may need to obtain the correct qualifications or apply for a licence. For example, if you’re thinking of running a childcare business, then you will need the appropriate certification. 

Likewise, if you plan on serving alcohol on your businesses premises, you will need to gain a permit for this. It’s important to research what requirements are relevant in your industry and make sure you attain them before opening to the public.  

6. Sort Out Your Office Space

Many business owners like to set up from home while others require a space outside of their residence. Either way, it’s important to have a designated area for business operations. 

If running your business from home is something you are considering, then think about any zoning requirements and council regulations (we’ve written more about laws on running a business from home). 

For others that want to rent out an office space, you will likely require a Commercial Lease – our lawyers can chat you through your options here. 

Do I Need A Commercial Lease?

Commercial leases are unique to other leases as the terms can be negotiated to suit your specific situation. Commercial lease agreements often discuss matters such as operating hours, use of the premises, rent abatement, fixtures, fittings, noise levels and termination. 

It’s good to have a legal professional draft and review your lease agreement for you. This way, you can be in the best negotiating position.  

7. Open A Business Bank Account

It’s also a good idea to keep your business’ finances separate from your personal ones. Depending on your business structure, it may be a requirement for the business to have its own bank account before it begins trading (i.e for a company). 

For some business types, such as a sole trader, there’s no legal obligation to have a separate bank account for the business. However, setting one up regardless can help keep things a bit more organised and easier to keep track of, particularly when it comes to matters like taxes. 

8. Get Your Legal Documents Sorted

The legal documents are one of the most important aspects of running a business. Legal documents generally work to protect your business and help keep it legally compliant, so you want to stay on top of this. 

Let’s go through the key required documents below.

Shareholders Agreement

Shareholders have ownership in the company and therefore  have considerable influence regarding company matters. In a company with multiple shareholders, it’s essential for all shareholders to follow the same rules so that everything runs smoothly. able 

A Shareholders Agreement lets shareholders know what is expected of them, the rights they possess, the responsibilities they have, what happens when they want to transfer shares, dispute resolution and anything else that is relevant to their role in the company.  

Company Constitution

A Company Constitution is the governing document that sets out how important company matters are dealt with. The Companies Act 1993 provides that if a company does not have a constitution, they should use the replaceable rules instead. 

It’s important that the constitution is drafted in a way that accurately reflects the company’s internal processes and rules. It’s wise to consult an expert lawyer for this scenario – reach out to our team for help. 

Employment Agreement

As we mentioned earlier, hiring employees means a few additional responsibilities such as getting the right contracts in place. If you are hiring staff, make sure you get an Employment Contract  that addresses pay, time off, work hours, responsibilities, professional conduct and anything else you may need. 

Any breach of the Employment Agreement can result in legal action, so make sure this is drafted appropriately. For example, if you dismiss an employee in a way that breaches the terms in your Employment Contract, you could be facing legal consequences under wrongful dismissal. 

It’s important to have a positive professional relationship with your employees – an Employment Agreement is a way to start this out.

Terms And Conditions

Terms and Conditions let others know what is expected of them when engaging with your business. It can also give you the authority to make decisions that are right for your customers (this depends specifically on the terms). 

For example, a Website Terms and Conditions can let customers know the behaviour that is expected of them on public forums, like a comments section. It can also give you the authority to remove anything inappropriate posted by a visitor. 

Terms and conditions can also aid with limiting your liability, so it’s worth looking into getting one.   

Supply Agreement

A supplier is someone that has been hired to provide something (such as resources or material) for your business, usually routinely. For example, a clothing manufacturer may have a supplier they purchase materials from. 

It’s important to have an agreement in place with your supplier so the relationship can work for both parties. A Supply Agreement addresses: 

• The goods to be supplied
• When the delivery is to be made
• Payment methods 
• Warranties
• Liabilities
• Dispute resolution 

If your suppliers are based overseas, you may need to consider additional factors such as how  to draft internationally enforceable contracts. 

Contractors Agreement

Rather than hiring internal employees for every task, some employers like to make use of contractors. A contractor is an external employee that is often there for a specific purpose or short-term project. For example, hiring an IT Professional to spend a few months helping code a program.

When hiring a contractor, the main thing to be careful of is ensuring that your contractor is not mistaken for an internal employee, as you could end up owing them employee benefits. 

A Contractor Agreement that clearly outlines they have been hired on a contractual basis is essential here.

9. Allocate Shares

When starting a company, one of the key things to ask is, “How do I allocate shares?”

There’s no singular answer to this! There are  a number of different options you could assess that all depend on your company’s individual circumstances. 

You will need to consider how shares will be divided, relevant agreements, shareholder rights, paying yourself as well as potential incentives for shareholders such as drag along or tag along clauses.

10. Protect Your Intellectual Property

Another key aspect of starting a business is making sure all your intellectual property (IP)  is secured. Protecting your IP is important because it is valuable to your branding and other key business activities. 

There are various ways you can protect your IP under the law, such as:&nbsp

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