If you’re a small business or SME owner, legal considerations are probably not the core part of your business (and not your favourite part!). This article offers tips on how to handle typical legals in the early stages of your small business or SME, such as business and intellectual property registrations, issues with consumers and contracts.
Business and Intellectual Property Registrations
In the early days of your small business, you’ll start with registrations. Typically, these are for your company name, your website and perhaps also your trademark. For each of these, you’ll need to fill in some paper work and submit those papers to the relevant regulator. You’ll likely come across intimidating phrases like ‘proprietary company limited by shares’ or ‘intellectual property protection’. Don’t freak out! There’s help at hand so you can sidestep this jargon. First port of call often is to contact the relevant regulator and review the information on their website.
- To register (incorporate) your company: Incorporator.
- For company name filings: contact ASIC (Australian Securities and Investments Commission).
- For domain name filings: contact auDA (au Domain Administration Ltd).
- For trademark filings: contact IP Australia.
We all know that a blunt pencil remembers more than a sharp mind, so when you contact the regulator, make sure you have pen and paper at hand as well as a speaker phone, if possible. Expect to wait some time, so use that time to prepare your questions in the most direct, simple way possible. When someone answers your call, be polite and friendly because you’re much more likely to receive better help that way. Take note of the date, time, the name of the person with whom you’re speaking, plus any other call details, such as their direct office number (if they offer it at the end of the call) or the number of another department to which they might direct you.
Issues with consumers – Know the Australian consumer law
It’s impossible to please everybody all of the time. If you encounter a consumer who takes issue with your product or service and starts making demands on you, it pays greatly to have even a basic awareness of the laws that typically arise in these kinds of situations. Suppose your matter concerns a sales dispute with a consumer. The lead regulators are the ACCC (Australian Competition and Consumer Commission) and your State or Territory government Fair Trading department. The main framework is the Australian Consumer Law. For your purposes, if you can simply acquaint yourself with a few key ideas and provisions, these will serve as a useful starting point in your discussions. A general overview is at “Consumer Protection: What To Do If Your Australian Consumer Law Guarantees Are Breached”.
Early stage agreements – Know your contract law
‘Memorandum of understanding?’ ‘Heads of agreement?’ ‘Letter of intent?’ Each of these headings appear at the top of countless documents that describe early stage ventures between businesses and fill legal databases to the brim because when one party decides it does not wish to proceed with the venture, the other party insists that ‘we had an agreement’. This is one area where truly a stitch in time saves nine. To the extent you can, try to resolve any ambiguity at the time of drafting by being explicit about whether ‘This document is intended to create legally binding relations, rights and obligations, between the parties’.
Every year, these documents are litigated. The latest leading case comes from Queensland (Baldwin & Anor v Icon Energy & Anor ), but without overwhelming you with the complexity of that judgment, a key take away from this case is to simplify your life by being clear and explicit about whether your business and the other party intend to create legal relations. Ask the question at the outset, not down the track in a court.
Useful Commercial Law Legal Documents
- Shareholders Agreement Template (General) Kit – Australia
- Shareholders Agreement Template (Buy Sell) Kit – Australia
- Confidentiality Agreement Template (NDA) for Australia
Congratulations, you’re lawyering for your small business or SME! It requires a bit of patience, confidence to not let the jargon intimidate you and keeping good notes of your conversations. When questions pop up at any point in the process, you have LawAnswers!