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Dinner and a movie remains a classic option for a night out, but many people are looking for something different to do on their Friday nights. Activities like paint and sip classes have been on the rise as more consumers seek unique and engaging experiences.
While paint and sip has been around for years, it has seen immense popularity in recent times. As a result, numerous paint and sip businesses have emerged, each offering their own take on this creative activity.
If you’re thinking of jumping on the bandwagon and starting your own paint and sip business, you could create the next popular destination for people to relax and explore their creativity. However, starting a paint and sip business involves more than just having the right acrylic paints and brushes. There are important legal considerations to address — and we’re here to help.
What Happens During A Paint And Sip Class?
Paint and sip is generally marketed as being a laid back and relaxing experience. A typical paint and sip session lasts for 2-3 hours. The paint and sip studio usually provides guests with the canvas, paint, aprons and a paint instructor to guide them through the creation of their masterpiece.
True to the name, paint and sip sessions usually have guests sipping on a beverage of their choice. Many paint and sip studios have BYO when it comes to food and drink however, you can always opt to supply drinks and snacks on site. If you plan on doing so, make sure you have the appropriate measures in place to keep food safe and the correct licensing to service alcoholic beverages, if that’s something you plan on doing.
It’s a wise idea to create a comprehensive business plan for your paint and sip business. There’s a lot of factors you will need to think about, from employees, to location and the exact services you will offer. Creating a business plan can help you work out the finer details and stay on track when you need a little guidance.
Registering A Paint And Sip Business In New Zealand
After you’re happy with your business plans, it’s time to start the process of registering your paint and sip business. This is an important step, as it will set out the foundations for your business. It’s important to have a clear understanding of key considerations such as future expansion goals, liability concerns, and legal compliance, as these factors are directly impacted by the type of business structure you choose.
In New Zealand, the most commonly registered business structures are sole trader, partnership, and company. Let’s take a closer look at each of them.
Sole Trader
- Ease of Registration: Sole trader businesses are relatively simple to set up. You’ll need to apply for a New Zealand Business Number (NZBN) and register your business name if it differs from your personal name.
- Low Maintenance: Sole trader businesses are not heavily regulated, so aside from meeting tax obligations, there are few ongoing legal requirements.
- No Limited Liability: A sole trader business is legally attached to you personally, meaning there is no separation between your personal and business assets. This exposes your personal assets to potential risks if the business encounters legal or financial issues.
Partnership
- Ease of Registration: Similar to a sole trader, a partnership requires an NZBN and a registered business name, unless operating under the partners’ personal names.
- Shared Responsibilities: A partnership allows multiple individuals to share business responsibilities based on their strengths. However, this also means each partner shares responsibility for the actions of the others, which could affect the entire business.
- No Limited Liability: Like sole traders, partnerships lack limited liability protection, meaning partners’ personal assets can be at risk.
- Partnership Agreement: To manage risks and set clear expectations, it’s advisable to have a formal Partnership Agreement in place. This document outlines roles, responsibilities, and procedures for resolving disputes.
Company
- More Complex Registration: All New Zealand companies must be registered with the Companies Office. This process involves submitting forms, establishing governance documents, and appointing company officeholders.
- Ongoing Compliance: Companies have ongoing legal obligations, such as filing annual returns, maintaining accurate records, and complying with tax requirements.
- Limited Liability Protection: A key benefit of a company structure is its status as an independent legal entity. This separation provides limited liability protection, safeguarding your personal assets from the company’s legal and financial obligations.
If your paint and sip business is a serious business venture, then a company structure is highly recommended. A company provides the most legal protection and gives you the flexibility for future growth opportunities, such as franchising your paint and sip business in a different location. We understand setting up a company can be an intimidating experience but there’s no need to stress — our legal experts are happy to do the work for you.
Do I Need Any Legal Documents To Start A Paint And Sip Business?
Protecting your paint and sip business is essential if you want it to thrive. How well you manage risks plays a significant role in determining success. The good news is, there’s no need to go to extreme lengths to try to stay ahead of any potential disasters — you simply need to have well drafted, specially tailored contracts in place. Here’s a few for you to consider:
Supply Agreement: Running a paint and sip business means you’ll use a lot of art supplies. If you decide to work with a supplier to keep your stock replenished, it’s essential to have a robust agreement in place with them.
Waiver: We know painting is a relatively low risk activity however, incidents can still occur (especially if there’s alcohol involved). A waiver can protect your liabilities.
Service Agreement: This outlines what customers can expect from your business, their rights and responsibilities, and any other important details.
Privacy Policy: If your paint and sip business has a website for bookings or providing information about your establishment, and you collect personal information, you are legally required to have a privacy policy in place.
Employment Agreement: As an employer, you must ensure your staff have certain entitlements and are clear on their roles and responsibilities. An employment agreement is vital for communicating these matters.
Commercial Lease Agreement: If you’re renting a space for your paint and sip studio, it’s crucial to have a commercial lease agreement that protects your best interests.
Website Terms & Conditions: A website can expose your business to various risks. Having terms and conditions on your paint and sip business’s website can help manage these risks, secure your payment streams, and protect your intellectual property.
Non-Disclosure Agreement (NDA): If you plan on sharing sensitive information about your business to another party, it’s essential to have a strong NDA in place.
What Laws Do I Need To Follow When Starting A Paint And Sip Business?
As you set up your paint and sip business, it’s important to remember the laws that impact your business. Legal compliance is a big part of making sure your business stays out of trouble, avoids fines and has a good reputation in the community. The exact laws that will apply to your business will depend heavily on factors such as location, size, and specific operations. Therefore, it’s always a good idea to seek professional legal guidance when understanding your legal obligations. For now, here’s a few regulations you may want to consider:
- Fair Trading Act 1986
- Permits and Registrations
- Privacy Act 2020
- Intellectual Property (IP) Law
- Employment Relations Act 2000
- Local Council Regulations
- Waste Management Rules
Seeking advice from a legal expert can help you understand the specific regulations you will need to think about when starting a paint and sip business – chat with one of ours today.
Key Takeways
When starting a paint and sip business, considering the legal factors are necessary to set your business up to be well secured and protected. To summarise what we’ve discussed:
- A comprehensive business plan for your paint and sip business is essential to define your services, location, staffing, and compliance needs.
- Registering your business is a critical step, with sole trader, partnership, and company structures being the most common in New Zealand, each offering different levels of complexity and liability protection.
- Legal documents such as supply agreements, waivers, service agreements, and employment contracts are vital to protect your operations and manage risks.
- Compliance with laws such as the Fair Trading Act 1986, privacy regulations, and local council rules is crucial for avoiding fines and maintaining a positive reputation.
- If offering alcoholic beverages, appropriate licensing is necessary, along with measures to ensure food and drink safety.
- Seeking professional legal advice can simplify compliance, registration, and contract drafting to set up your paint and sip business for success.
If you would like a consultation on starting a paint and sip business, you can reach us at 0800 002 184 or [email protected] for a free, no-obligations chat.
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