Starting a business? Where you may need legal advice

Starting a business is an exciting endeavour but it comes with legal complexities and potential pitfalls that new entrepreneurs must navigate. Many new business owners underestimate the importance of seeking legal advice early in the process. In this article, we will explore where you might need legal advice when starting a business, the benefits of getting legal advice from the outset, and how to avoid common traps.

For more information catered to your specific situation, contact Advocate Lawyers on 03 6204 9000.

Choosing the right legal structure: Sole Trader, Partnership or Company?

Legal advice is invaluable when forming your business. Choosing the right legal structure (sole trader, partnership, corporation etc.) can significantly impact the tax you pay, your personal liability, and long-term growth prospects. A business lawyer can help you understand the implications of each entity type and assist you in selecting the one that best aligns with your business goals. Getting the right advice first may avoid having to restructure later.

For example, if you run your business through a limited liability company then a proper structure should protect your personal assets from any claims relating to your business. If your business takes off, a company structure will limit the tax you pay to 25%, a staggering saving on the 32.5% that you will pay as a sole trader if your business has profits of more than $45,000 annually.

Setting up your Contracts

Contracts are the backbone of any business. They govern relationships with customers, vendors, suppliers, partners, and employees. Crafting well-written and comprehensive contracts is crucial to protect your interests and minimize future disputes. An experienced lawyer can help you understand the terms and implications of contracts, identify potential loopholes or unfavourable clauses, and ensure your rights are adequately protected. Depending on they type of business, it may be important to have ‘terms and conditions’ to refer customers to.

Things to avoid when setting up your business

There is a lot to starting a business. We see some common traps that clients fall into when trying to save costs on startups. Here are some things to watch out for:

Avoid ambiguous language in your contracts

Ensure contracts are precise and unambiguous to prevent misunderstandings or misinterpretations in the future. Don’t use an unedited template that you have downloaded from the internet, particularly if you don’t understand it.

Ensure your contracts include all key terms

Contracts should cover all essential details, such as payment terms, deliverables, timelines and dispute resolution procedures.

Be clear on indemnification and liability.

What happens if the product is faulty or there is an issue with your services? You should ensure that you have terms and conditions or contracts which spell out limitations of your liability, indemnifications and insurance requirements to avoid any unnecessary exposure to risk.

Copyright, trademarks and intellectual property

Check your business name and register it! It’s important to make sure that you are not using a business name that has already been taken which would cause you to have to change your name later. If you have particular branding then ensure that you trademark it. When creating products or services, you will also want to ensure that you know who owns the intellectual property behind those products or services.

Clearly define termination and renewal

Clearly define termination conditions and renewal options to prevent unexpected contract terminations or extensions.

Compliance with relevant laws and regulations

Each industry has its own complexities and generally, there will be certain regulations that your business must adhere to. Navigating these legal requirements can be overwhelming, especially for new entrepreneurs who are starting a business. Seeking legal advice can help you understand and ensure compliance with all applicable laws, protecting your business from potential fines, penalties, or later legal action.

Complying with Employment Law

One of the most common regulatory requirements will be compliance with the National Employment Standards and any applicable Awards that set the minimum wage and standards for specific industries. There are certain provisions that you cannot contract out of such as minimum wage, payment of overtime, employee rights, and workplace safety regulations. You can find more information in relation to employment conditions on the Fair Work Ombudsman’s website here.

Failure to adhere to these laws can result in costly legal disputes such as a claim for unfair dismissal as well as reputational damage. A knowledgeable lawyer can guide you through the complexities of employment laws, draft employment contracts, and establish workplace policies that safeguard both your business and your employees.

Benefits of Getting Legal Advice Early

By getting legal advice early, you can:

  • Reduce risk and protect your interests
  • Reduce costs and save time on disputes later
  • Get peace of mind knowing that your business is legally sound, compliant, and won’t require a major restructure later
  • Set you up for success!


From selecting the right entity structure to creating robust contracts, Advocate Lawyers aims to be part of the team, not only assisting clients with setting up their business but being available to provide support in the long run. If you have questions about how we can assist you please contact us on 03 6204 9000. We can create packages that suit the needs of your business.

How can we help you?

Contact us on (03) 6204 9000 or submit a business enquiry online.

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