- Choose the structure that fixes your liability
- The consumer law you cannot contract out of
- What turns a handshake into a binding contract
- What your first employee triggers
- When the Privacy Act starts applying to you
- Protecting your brand and your content
- The tax registrations that sneak up on you
- The documents that do the heavy lifting
- Where an Artificer Legal lawyer earns their keep
- The threshold that catches most businesses out
Most Australian businesses do not run into legal trouble because their owners ignored the law. They trip over obligations they did not realise they had triggered: a "no refunds" sign that sits on the wrong side of the consumer guarantees, a business name registration that turns out to offer no brand protection, or a first hire that quietly switches on Fair Work, PAYG and superannuation obligations overnight. This guide sets out the legal ground rules that apply to a typical small or medium Australian business, including the thresholds and figures that decide when each rule starts to bite, and where a lawyer earns their keep.
Choose the structure that fixes your liability
The first legal decision is structural, because it decides who is on the hook when things go wrong.
- Sole trader: The simplest and cheapest way to run a business, but there is no separation between you and it. Debts, claims and liabilities of the business are yours personally, and your personal assets are exposed.
- Partnership: Two or more people share ownership, profits and risk. Partners are generally personally liable for the debts of the business, so a written partnership agreement covering contributions, profit shares, decision-making and exit terms is the first document to put in place.
- Company (Pty Ltd): A company is a separate legal entity registered with ASIC under the Corporations Act 2001 (Cth). Limited liability means shareholders are generally not personally liable for the company's debts beyond what they have invested. The trade-off is ongoing compliance: ASIC registration and fees, directors' duties, and reporting obligations that grow with the size of the company.
- Trust: A trustee holds assets for the benefit of beneficiaries, which can support asset protection and tax flexibility. A trust requires a deed and ongoing administration, and the trustee carries real duties. Get legal and accounting advice before choosing this route.
Whatever structure you pick, apply for an ABN, and if you trade under a name other than your own legal name, register a business name with ASIC. That registration lets you operate under the name, but it gives you no exclusive rights in it. Exclusive rights come only from a registered trade mark, which is covered below.
Separately, some activities require specific approvals before you can lawfully trade: food and beverage, liquor, building and construction, health and cosmetic procedures, childcare and transport all sit behind federal, state or local council licences and permits. Check the requirements for your exact activity and premises before you launch, not after.
The consumer law you cannot contract out of
The Australian Consumer Law (the ACL), which is Schedule 2 of the Competition and Consumer Act 2010 (Cth), applies to almost every supply of goods or services to a consumer in Australia, whether from a shop, a website or a service desk.
Section 18 of the ACL prohibits misleading or deceptive conduct in trade or commerce. This reaches advertising, product pages, sales scripts, pricing and even what you leave unsaid. A representation that is literally true but creates a misleading overall impression can still breach it.
The ACL also implies a set of consumer guarantees into every supply to a consumer. Goods must be of acceptable quality, meaning fit for their common purposes, safe, durable and free from defects (s 54). Goods must be reasonably fit for any purpose you disclosed (s 55). Services must be provided with due care and skill (s 60). Section 64 makes void any contract term that tries to exclude, restrict or modify these guarantees, which is why a blanket "no refunds" sign does not work for consumer purchases. Under s 259, for a major failure the customer can reject the goods and choose a refund or replacement; for a minor failure you generally get the chance to remedy it within a reasonable time.
Who counts as a "consumer" matters, because that is when the guarantees apply. Under s 3 of the ACL, a person is a consumer if the price paid or payable is $100,000 or less, if the goods or services are of a kind ordinarily acquired for personal, domestic or household use, or if the goods are a vehicle or trailer used principally to transport goods on public roads. There is a presumption in favour of consumer status, so the practical answer is to design your refund and returns processes as if the guarantees apply to everyone.
Finally, unfair terms in standard form consumer contracts and small business contracts are void, and penalties now apply to proposing or relying on them. Under s 224 of the ACL, a company faces a maximum penalty of the greater of $100 million, three times the value of the benefit obtained, or 30% of its adjusted turnover, and an individual faces up to $2.5 million. A small business contract is one where at least one party employs fewer than 100 people or has an annual turnover under $10 million (s 23(4)), which covers most Australian SMEs. If your boilerplate terms are a few years old, they deserve a review on this point alone.
What turns a handshake into a binding contract
A binding contract generally needs an offer, acceptance, consideration and an intention to create legal relations. A few categories also need writing, such as contracts for the sale of land and guarantees. Everything else can be formed by email, a nod or a handshake, which is exactly why disputes happen.
The value of a written contract is not the legal formalities. It is setting expectations and allocating risk before the money flows. A solid customer or supplier agreement covers the scope of work, deliverables, price and payment terms, timelines, ownership or licensing of intellectual property, confidentiality, liability caps, termination and how disputes are resolved, such as a short negotiation window before formal proceedings. Keep templates aligned with how you actually trade; a template that contradicts your real process creates its own disputes.
What your first employee triggers
The moment you employ someone, the Fair Work Act 2009 (Cth) applies. The National Employment Standards set minimum conditions for every national system employee, modern awards or enterprise agreements may set higher pay and conditions, and the national minimum wage applies where no award covers the work.
You must also give every new employee the Fair Work Information Statement, casuals must receive the Casual Employment Information Statement before or as soon as possible after they start and again at set times, and fixed-term employees must receive the Fixed Term Contract Information Statement. Alongside those, you are required to keep accurate time and wages records and to issue payslips. These records are usually the first thing a regulator or a lawyer asks for if a dispute arises.
Work health and safety duties run alongside employment law. State and territory WHS Acts impose a primary duty on every person conducting a business or undertaking to ensure, so far as reasonably practicable, the health and safety of workers. The duty applies even to micro-businesses and extends to remote and hybrid workers, so hazard identification, training and incident reporting should be part of your operations from the start.
A written employment contract is not strictly required by the Fair Work Act, but it is best practice. It should set out duties, pay, intellectual property ownership, confidentiality and any post-employment restraints, and it should be paired with practical workplace policies on leave, discrimination and harassment, IT and social media use, and safety.
When the Privacy Act starts applying to you
The Privacy Act 1988 (Cth) regulates how organisations handle personal information through the 13 Australian Privacy Principles (the APPs). It applies to "APP entities", and the starting point for a business is turnover: if your annual turnover is more than $3 million, you are covered.
If your turnover is $3 million or less you are generally exempt, unless an exception applies. The OAIC lists the situations where even a small business is covered: providing a health service, trading in personal information, supplying services under a Commonwealth contract, handling tax file numbers, operating a residential tenancy database, being a credit reporting body or an AML/CTF reporting entity, opting in to the Act, or being related to a business the Act covers. Health service providers are a common trap, because the definition reaches well beyond doctors and dentists to allied health, private schools, childcare centres and similar providers.
If you are an APP entity, you need a privacy policy, you must handle personal information in line with the APPs, and under the Notifiable Data Breaches scheme in Part IIIC of the Privacy Act you must notify the OAIC and affected individuals when a data breach is likely to result in serious harm. Even if you are exempt, a clear privacy policy is expected by customers and often required by platforms and payment providers, and if you target customers overseas, regimes such as the GDPR can apply to you regardless of your Australian turnover.
Protecting your brand and your content
Brand and content are assets, and the law protects them through trade marks and copyright, not through registration of your business name.
A business name registered with ASIC simply tells the public who is behind the business. It gives you no exclusive rights. A registered trade mark does: it gives you the exclusive right to use the mark in Australia for the goods and services classes you register, it lasts 10 years and can be renewed indefinitely, and it supports enforcement against copycats and rebranding risk. Trade mark applications are examined against existing marks, so filing early, before you commit to packaging and marketing spend, is the cheaper path.
Copyright protects original content automatically when it is created. There is no registration system in Australia. What needs attention is ownership: work created by employees in the course of their employment is generally owned by the employer, but work created by contractors is not automatically yours. Your employment and contractor agreements should assign or licence intellectual property expressly, and non-disclosure agreements should protect confidential information shared in negotiations with partners, suppliers and investors.
The tax registrations that sneak up on you
GST registration is the threshold most businesses miss. You must register within 21 days once your GST turnover reaches, or is likely to reach, $75,000 in a 12-month period, or $150,000 for non-profit organisations. Ride-sourcing and taxi services must register regardless of turnover. If you fail to register when required, you can owe GST on sales made since the date you should have registered, plus penalties and interest.
Employment switches on more obligations at once: PAYG withholding from wages, and superannuation guarantee contributions, currently 12% of ordinary time earnings, having risen from 11.5% on 1 July 2025. State-based payroll tax applies once your wages exceed each state's threshold, which differs from state to state.
Tax settings interact with your structure, so this is where an accountant earns their keep. GST, PAYG, super and payroll tax are all grounded in how you structure, employ and trade, and the information here is general, not tax advice.
The documents that do the heavy lifting
Not every business needs every document on day one, but most need several of these, and they work as a set:
- Customer terms: The core contract for what you sell, covering scope, deliverables, pricing and payment, timelines, IP ownership or licences, cancellations, liability caps and ACL-aligned remedies.
- Privacy policy: Mandatory if you are an APP entity, and strongly recommended for any business that collects customer data.
- Employment contracts and policies: Duties, pay, IP ownership, confidentiality and restraints, supported by practical workplace policies.
- Contractor agreements: Written terms that clarify status, IP ownership, confidentiality and payment, because contractor work does not automatically belong to you.
- Shareholders agreement: For co-founders and investors, covering decision-making, roles, equity, vesting, exits and dispute processes. Not legally required, but the document that prevents most co-founder disputes.
- Non-disclosure agreement: Use it whenever you share non-public information with partners, suppliers or prospective investors.
- Website terms: Terms of use, acceptable use rules, and returns and shipping notices that line up with the ACL.
Keep the set consistent: your customer terms should reference your privacy policy, and your employment and contractor agreements should agree on who owns what IP.
Where an Artificer Legal lawyer earns their keep
None of this requires you to become a lawyer, but several of the judgement calls are exactly where a commercial lawyer adds value. Choosing a structure that suits your liability and tax position, deciding whether the Privacy Act covers you, checking whether your standard terms contain unfair terms, drafting employment and contractor agreements, and mapping trade mark strategy are all decisions where the cost of a wrong guess shows up later.
A practitioner at Artificer Legal can review and redraft your templates before you use them, advise on the specific facts of your business, negotiate contracts on your side, and help you respond if a customer, employee or regulator raises an issue. The cheapest version of this is a review before you sign your first large customer contract, make your first hire, or launch with a new brand.
The threshold that catches most businesses out
The pattern that causes the most trouble is not any single law; it is the thresholds. A business can trade happily below the GST threshold and then cross $75,000, leaving it 21 days to register. Privacy obligations switch on at $3 million turnover, or the day a business starts providing health services or trading in personal information. The unfair contract terms penalties apply to contracts with businesses employing fewer than 100 people or turning over under $10 million, which describes most of the businesses reading this. And the first employee turns on Fair Work, PAYG, super and WHS obligations at once. The businesses that get caught are the ones that treat compliance as a one-off launch checklist instead of something to re-check as they grow.
The core legal foundations are the structure you choose, the registrations you complete, the consumer law you cannot contract out of, clear written contracts, and the obligations that switch on with headcount, turnover and data handling: Fair Work and WHS when you employ, the Privacy Act when you cross $3 million or fall within an exception, trade marks for your brand, and GST at $75,000. Knowing which rules apply to you now, reviewing your documents as the business changes, and taking advice on the judgement calls before they become expensive is the whole of the game.