Any activity which you engage in for the purposes of making a profit can be considered a business. Formalising an enterprise and setting up a business is a big decision from which a lot of different consequences can flow. There are many legal aspects of your business to consider before and during establishment to ensure that the set-up will work for you professionally as well as personally.

First you will need to decide the most appropriate way to structure your business. This decision can lead to many different legal and taxation consequences. There are a range of business structures available in Australia. This guide outlines the most common business structures:

• sole trader;
• partnerships;
• companies; and
• trusts. 

There are advantages and disadvantages associated with each of these depending on both your business and personal goals.

You will also need to consider the legal requirements of the particular industry in which you operate such as:

• licensing;
• regulations;
• trade marks;
• employment of workers;
• taxation; and
• insurance.

Your decisions when setting up a business should reflect your specific business needs. Important considerations will include:

• what type of enterprise you are carrying on;
• what industry you operate in;
• your annual revenue;
• the size of your business;
• taxation obligations;
• whether you intend to employ people;
• whether your business involves any high value assets; and
• whether there are any relevant regulations.

Usually when starting up a small or medium business there are also personal considerations like your family situation and personal estate. The choice of business structure and the consequences which flow from that can impact on these elements of your life. You should consider not only how to run a business but how you can set up your business most appropriately for future personal or family wealth accumulation.

This Legal Guide on Starting a Business provides information about business structures as well as considerations for the establishment and management of your business. Before making important decisions it is advisable to obtain legal advice specific to your situation. LegalEagle’s™ free directory profiles all lawyers in Australia. You can use it to Find a Lawyer near you.

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Warning: Information provided through LegalEagle™ is for general guidance. It is not legal advice. Laws and procedures referred to may change and differ between states, territories and nationally. There may also be important exceptions or qualifications. Only a lawyer providing formal legal advice can assess your particular circumstances to determine how the law will apply.