Sapna is a content writer at Sprintlaw. She has completed a Bachelor of Laws with a Bachelor of Arts. Since graduating, she has worked primarily in the field of legal research and writing, and now helps Sprintlaw assist small businesses.
Contents
Expertly crafted cocktails, a great atmosphere, the right ambience and professional service- there’s a lot that goes into starting a bar. However, if you can establish your bar as the next go-to spot, it just might become one of those places people love to flock to on a Friday night.
In this article, we’ll take a look at some of the legal aspects of starting a bar so your new venue can get off to a strong start.
How Do I Start A Bar In New Zealand?
There’s a lot more to starting a bar in New Zealand than getting a killer wine list. You’ll need to think about things like business structure, regulatory compliance, licences, permits and protecting your business. Most of this will fall under your business's legal considerations. The legal aspect of starting your bar will be just as important (if not more important) than any other aspect of your business.
This is because running a successful establishment isn’t just about what’s happening on the surface. It’s got a lot to do with the things most people won’t see. For instance, picking out the right business structure, having contracts that protect your business and following the correct laws so everything can run smoothly.
So, if you’re thinking of starting a bar in New Zealand, it’s important to start with sorting out the legal matters first.
How To Start A Bar Business: Set Up And Registration
One of your first steps to starting a bar is getting it officially registered. To do this, you’ll need to pick out a legal structure for your business. Commonly, businesses are often registered as a sole trader or a company (however there are other options to).
The structure you pick will depend on your unique circumstances. When making this decision, it’s important to factor in things like costs, upkeep and liability so you can make the choice that suits your business best.
A few questions you can ask yourself include:
- Do I want something that has little to no upkeep?
- Or am I okay with a business structure that demands more time and attention?
- Do I feel comfortable shouldering the liability of the business on my own?
- Would I rather have protection from liability?
- Am I willing to invest extra time and resources into starting my business?
- Do I want something that’s quick and simple?
- Do I want my business to operate separately from me or is it better to have my business personally attached to me?
Having answers to these questions can help you determine the right legal structure for your business. If you're having trouble, it can be helpful to discuss things with a legal professional and get some expert guidance.
Once you determine the structure of your business, it’s time to register it.
Many business owners opt for the sole trader route due to its practicality and simplicity. Setting up as a sole trader is relatively quick and easy. You just need to apply for your NZBN and let Inland Revenue know you're starting a sole trader business, then you’ll be all set to go. Keep in mind, registering as a sole trader means your business will not be legally separate from you, so you will be personally responsible for everything that happens with your bar.
Setting up a company is a more complex process. It involves registering with Companies Office and meticulously following all the regulations. Once it’s done correctly though, your company will be a legal entity on its own. This means your bar’s debts, profits, legal matters and liabilities will belong to the company itself. As we noted, setting up a company isn’t exactly a simple process- it’s best to have the help of an expert when doing this. Our expert lawyers are happy to help you set up your company and save you the hassle.
How Much Does It Cost To Start A Bar?
The cost for starting a bar varies on a number of different factors that will be determined by your individual situation. Therefore, it’s difficult to give an exact number. You’ll need to think about things like set up costs, rent, supplies and decor. Factoring in all of that will help you decide how much starting your bar will cost.
We recommend carefully planning out your finances and setting it out in a Business Plan. That way, you’ll have everything in the one place and it will be easier to spot any potential weak points that need to be worked on. Additionally, if you plan on Raising Capital to start your business, your potential investors will want to see your bar's business plan. Having one prepared can show professionalism and planning- though it’s important to have an NDA in place before you show your business plan to anyone!
Do I Need Any Legal Documents To Start A Bar?
When your bar's planning and registration is done, it’s time to start looking at getting your legal agreements sorted. Strong, well drafted legal agreements will help protect your bar while it’s running. You don’t want a single problem taking the whole operation down- so it's worth investing in some professionally drafted contracts.
We’ve listed a couple of contracts you may want to consider getting below.
Supply Agreement
In order to sell alcohol, you'll obviously be buying it from somewhere. You’ll likely buy your bar’s alcohol from a supplier. It’s necessary to have a legal agreement in place with any suppliers you might have. A Supply Agreement covers things like delivery expectations, warranties, liabilities, payment and termination. The agreement can help make sure things stay consistent as well as protect your bar, in case something goes wrong.
Business Terms And Conditions
Every establishment has its own set of rules. Clearly communicating these rules is essential, so others can know what’s expected of them when they enter your premise. Having Business Terms and Conditions can help you do this. Additionally, a well written business terms and conditions can aid you in maintaining any necessary control as well as protect your liabilities.
Employment Agreement
Running a bar on your own might get tricky, so at some point you might hire staff to help out with the business. As exciting as having a growing team can be, it’s important to start your relationship with your employees off on a professional note. An Employment Contract can help set out any expectations and prevent miscommunication between you and your employees.
Any Other Legal Considerations For Starting A Bar?
As a bar, there’s a particular standard you will be held to. Serving alcohol and food to people isn’t something that is taken lightly, as you’ll be responsible for a lot of what happens in your establishment.
There’s no need to stress though. Following the correct laws and regulations will help you keep your guests safe and minimise your bar's liability.
Here’s a couple of main things you need to be aware of:
Regulatory Compliance
Knowing the applicable regulatory compliance measures is key when you're serving food and alcohol. The last thing you want is your bar getting shut down because you failed to properly comply. As the owner of a bar, it’s important to sort out things like liquor licences and be aware of food safety standards as well as procedures.
To achieve this, you will need to check local council and state regulations. This will determine what kind of licence, permits and approvals you will need. Keep in mind, every local council tends to have their own restrictions, such as noise regulations and zoning laws. It’s crucial to conduct thorough research on these things before starting your bar. If you're feeling overwhelmed or confused by the sheer amount of things you need to look out for, it can help to receive expert guidance from a Regulatory Compliance Lawyer.
Consumer Protections
When you start a bar, you will be both a consumer and the one serving consumers. This is why you need to have a good understanding of New Zealand Consumer Law. When you serve your customers, it’s important to understand your rights and duties towards them. Similarly, as a business you are likely to be engaging in contracts and buying from your suppliers, so understanding your own rights can keep your business operations running smoothly.
Understanding consumer law isn’t necessarily a walk in the park, as there’s a lot of different factors to consider. Having an expert explain your duties and rights in simple terms can make things a lot easier, so get Consumer Law Consultation with one of our legal experts today to ensure you start your bar as well prepared as possible.
Can I Start A Pop Up Bar?
Starting a pop up bar requires the same legal considerations that we ‘ve discussed in the article, plus a few extras. Even if you’re just temporarily selling alcohol in a pop up bar, you’ll need to attain a specific licence for this. This will depend on the state and territory you're in. It's important to conduct your research and see what you will need to get sorted prior to starting a pop up bar. If you need help, our legal experts are happy to talk you through it.
Next Steps
When you're starting a bar, you need to take care of all the legal considerations first. That way, you can be assured you’re running a safe and legal establishment. To summarise what we’ve discussed:
- When starting a bar, legal considerations are crucial for your bars success
- Choosing the right legal structure for your bar, such as sole trader or company, depends on factors like costs, liability, and separation from personal assets
- Sole trader registration is relatively straightforward, requiring an NZBN and notifying Inland Revenue
- Setting up a company is more complex and involves registering with Companies House
- Professional legal guidance is recommended for setting up a company to ensure compliance and proper establishment
- Starting costs for a bar vary based on individual circumstances, including setup expenses, rent, supplies, and decor
- Creating a business plan is essential to carefully plan finances and attract potential investors, but ensure a non-disclosure agreement is in place
- Strong legal agreements such as Supply Agreements, Business Terms and Conditions, and Employment Agreements are crucial for protecting the bar's operations
- Regulatory compliance is vital, covering areas like liquor licences, food safety, and local regulations. Expert guidance can be beneficial
- Having a good understanding of consumer law is crucial for both serving customers and engaging in business contracts. Consulting legal experts can help simplify this
- Starting a pop-up bar involves additional legal considerations, including obtaining specific licences based on the state or territory
If you would like a consultation on your options moving forward, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
Sapna Goundancontent writer
