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When it comes to spreads, jam is easily one of the most popular. From classic strawberry jam to more unique flavours like pineapple or guava, it’s a staple that many people have enjoyed.
However, not everyone has the time or patience to perfect the ideal jam recipe for their morning toast. That’s why jam is often purchased commercially. If you’ve mastered a brilliant jam recipe and are eager to share it with the world, starting your own jam business might be on your mind.
This is fantastic! The first step to achieving jam greatness is launching your business. However, there are several legal factors to consider when starting a jam business. Keep reading to learn more and ensure you’re well-prepared for success.
How Can I Start Selling My Own Jam?
To start selling your own jam, you’ll need to get a few things in order. Any kind of business requires planning and preparation — your jam business is no exception.
Key factors such as legal compliance, finances, competition, and marketing will all influence your success. Additionally, you’ll need to consider practical aspects, including where your jam will be made, how and where it will be sold, and the packaging and distribution requirements.
Creating a business plan is a smart first step. While it doesn’t need to be overly rigid, it should be detailed enough to serve as a blueprint for your business. If you ever lose track or need to revisit important details, your business plan can provide valuable guidance. For tips on how to get started, check out our article on writing a business plan here.
Starting A Jam Business In New Zealand: Registration And Legal Protection
The most essential steps to starting your jam business include getting your business properly registered and ensuring it has the necessary legal protections in place.
Register Your Jam Business
Before registering your jam business, it’s important to choose the right business structure. In New Zealand, the most commonly registered structures are sole trader, partnership, and company. The structure you select will depend on factors such as your plans for future growth, liability concerns, and legal compliance requirements.
Sole Trader
A sole trader business is typically owned and operated entirely by the founder. If you prefer having full control over your business, you might consider registering your jam business as a sole trader. However, it’s important to understand the risks. As a sole trader, your business is legally attached to you, meaning you have no liability protection if the business encounters financial or legal issues.
Many new business owners overlook this risk because registering as a sole trader is relatively simple. All you need to do is apply online for a New Zealand Business Number (NZBN) and register a business name. Be sure to research your chosen name beforehand, as it may already be taken. The only exception to registering a business name is if you plan to operate under your personal name—in that case, you can skip the name registration process.
Partnership
A partnership business is registered in a very similar way to a sole trader business. You simply need to obtain a New Zealand Business Number (NZBN) for your jam business and register a business name, unless you meet the exception of using the partners’ personal names.
Starting your jam business with multiple people can be a great way to divide responsibilities based on individual strengths. When partnerships work well, they can be highly beneficial. However, partnerships also carry risks, as all partners share equal responsibility for the business. It only takes one partner’s actions to jeopardise the entire operation.
To minimise risks, it’s a good idea to have a formal agreement in place, such as a Partnership Agreement. This ensures all partners are aligned and understand their roles, responsibilities, and expectations.
Company
A company is the legal structure that offers the most legal protection. This is because, when you register a company, you have limited liability. Unless you sign away these rights, you’ll only be liable for what you’ve invested in the company, protecting your personal assets if the business encounters legal or financial difficulties.
Many business owners find the idea of registering a company intimidating—and that’s understandable. The process involves complex decisions, such as determining governance structures and appointing directors. Additionally, navigating the New Zealand Companies Office’s rules and regulations might feel overwhelming at first. However, it’s crucial to familiarise yourself with these regulations, as the Companies Office oversees companies in New Zealand, and your obligations to them continue long after registration.
Despite the complexity, registering a company has significant benefits. It’s the only legal structure that provides the protection of limited liability. A company structure also supports future business expansion, offers greater credibility with potential investors, and provides long-term flexibility. This makes it the preferred structure for serious business ventures.
Whether you’re starting your company with partners or as the sole owner, a shareholder structure can be tailored to suit your needs. To ensure your company is set up correctly and complies with all legal requirements, seeking professional legal guidance is highly recommended. Our experts are always ready to help.
Register Your Jam Business’s Intellectual Property
Your jam business won’t be the only one on the market when you launch, and it’s unlikely to be the last to enter the scene. To stand out from competitors, it’s crucial to legally secure what belongs exclusively to your business. This typically involves protecting your intellectual property (IP). For most businesses, IP often includes assets like a logo and, in some cases, the business name.
Registering these assets as trade marks gives you legal ownership for 10 years (with the option to renew after that period) and helps prevent others from infringing on what’s yours. If someone does attempt to misuse your IP, having registered trade marks puts you in a much stronger position to enforce your rights.
The process of registering a trade mark can be complex. It involves conducting thorough research, determining the correct class for your trade mark, and addressing any opposition that might arise. Without the right guidance, this can feel overwhelming, which is why we always recommend seeking expert legal help to secure your IP effectively.
Does My Jam Business Need Any Legal Documents?
Another important factor when it comes to protecting your jam business is having the right legal documents in place. Even the most low risk businesses come with some type of risk. Fortunately, these risks can be managed with good legal documents, such as contracts and disclaimers. However, not just any legal documents will do. For contracts to work effectively, they need to be well drafted and tailored to meet the needs of your business. Here’s a few legal documents for you to consider getting:
- Disclaimer
- Supply Agreement
- Employment Contract
- Distribution Agreement
- Privacy Policy
- Business Terms & Conditions
- Non-Disclosure Agreement (NDA)
What Laws Will My Jam Business Need To Follow?
A number of laws and regulations will impact your jam business. As a business owner, it’s crucial to understand these laws from the outset and implement compliance measures into your operations. Failing to do so can result in serious consequences, including fines and reputational damage — both of which can harm your business. To protect your venture, ensure you do your due diligence, familiarise yourself with relevant regulations, and seek expert legal advice whenever needed. Here’s some regulations you may want to consider:
- Food Safety Laws: Ensure you are following the relevant food safety standards, such as those outlined by Food Standards Australia New Zealand (FSANZ), which detail how your products and ingredients should be prepared, handled, and stored.
- New Zealand Consumer Law: The New Zealand Consumer Guarantees Act and Fair Trading Act protect consumer rights and cover matters highly relevant to your jam business, including product quality, returns, refunds, pricing, labelling, and advertising.
- Data & Privacy Law: Protecting consumer information is essential. Ensure you have the necessary legal documents, such as a privacy policy, in place to comply with data protection laws.
- Employment Law: If you plan to hire staff, ensure they are treated fairly and receive the correct entitlements under New Zealand employment regulations.
- Local Rules: Depending on where you operate your jam business, you may need to comply with local regulations and obtain any necessary permits or licences.
- Environmental Regulations: As a food producer, it’s crucial that your waste management and production practices align with applicable environmental laws to minimise impact and maintain compliance.
- Import/Export Laws: If you plan to import ingredients or export your jam internationally, ensure you comply with trade laws, tariffs, and food safety standards in the respective countries.
Key Takeaways
Starting a jam business can be a great way to turn your jam-making skills into a profitable venture. However, it’s crucial to address the legal aspects to ensure your business is set up correctly. To summarise what we’ve discussed:
- Starting a jam business involves careful planning, including creating a business plan that addresses production, distribution, marketing, and legal compliance.
- Choosing the right business structure, such as sole trader, partnership, or company, is critical and depends on factors like liability concerns and growth plans.
- Protecting intellectual property, such as trademarks for logos and business names, is essential to secure legal ownership and stand out from competitors.
- Key legal documents, including disclaimers, supply agreements, privacy policies, and NDAs, help manage risks and protect your business.
- Compliance with laws like food safety standards, New Zealand Consumer Law, and environmental regulations is vital to avoid fines and reputational damage.
- Consulting with legal experts is recommended to handle complex processes like trade mark registration, company governance, and compliance with industry laws.
If you would like a consultation on starting a jam business, you can reach us at 0800 002 184 or [email protected] for a free, no-obligations chat.
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