To start a small business in Australia legally, you need to choose the right business structure, get an ABN, register your business name with ASIC (unless you trade under your own name), register for GST once you reach $75,000 turnover, and put proper client terms, website terms and a privacy policy in place from day one. Here's how to do it in the right order.
So, you've decided it's time to start the business you've been thinking about. Congratulations. Done properly, it may be one of the best decisions you ever make.
The decision to start my own business changed my life. I backed myself, took the leap, and I've never looked back. Now I'm privileged to work with new business owners every week, and I still feel that same excitement for every one of them.
I also know how overwhelming the early days can be. There is so much information out there, and so many things that seem to need doing at once. This handbook cuts through it: the legal foundations to put in place when you start, in the order that makes sense, so you can get on with the work you love.
What legal steps do I need to take before I start?
Work through these in order. Each one sets up the next, and doing them out of order is where most early mistakes happen.
Check your name is available, and protectable. Search the business names register and the trade mark register before you fall in love with a name.
Choose your business structure. Sole trader, partnership, company or trust, ideally decided with your accountant.
Register. Get your ABN, register your business name, and register for GST if you'll reach $75,000 turnover. A company also needs to be registered with ASIC, and its directors need Director IDs.
Secure your domain and social handles in the name you've chosen.
Put your legal documents in place before your first client. Client terms, website terms and a privacy policy.
Arrange your insurance, especially professional indemnity and public liability.
Set up to get paid. A separate business bank account, invoicing linked to your terms, and bookkeeping software.
Build your team of advisers. An accountant, a lawyer, and the people who can support you as you grow.
The rest of this handbook walks through each step.
Which business structure should I choose?
The right structure depends on your risk, your plans for growth and your tax position. The four common options:
Sole trader. The simplest and cheapest to set up. You and the business are the same legal person, so you are personally liable for every debt and claim (this means your personal assets, including your home and savings, are exposed if you can't pay your debts).
Partnership. Two or more people in business together for the purpose of making a profit. Each partner can be liable for the whole partnership's debts, not just their share, so a written partnership agreement is essential.
Company. A separate legal entity that can limit your personal liability. It costs more to set up and run, comes with directors' duties and reporting to ASIC, and gives you more room to grow, bring in investors or sell.
Trust. Usually run through a company acting as trustee. It can offer asset protection and flexibility in how income is distributed, but it's the most complex option and needs careful advice from your accountant.
A word of caution about "limited" liability: it isn't unlimited protection. Directors can still be personally liable through personal guarantees, insolvent trading and some unpaid tax debts.
The tempting choice is often whatever has the cheapest registration and the least paperwork. Resist it. The wrong structure is far more expensive to live with than the right one is to set up, and it's never too late to change. I explain the differences in sole trader or company: what is the best business structure for me?
What do I need to register when starting a business?
Most new businesses need three registrations, and some need a fourth:
An ABN (Australian Business Number). Free to apply for, and needed to register a business name and invoice your clients.
A business name, registered with ASIC, if you trade under any name other than your own. Since November 2025, unregistered trading names no longer appear on ABN Lookup, so clients searching for you will only find a registered name.
GST, once your annual turnover reaches $75,000 (or earlier if you choose to).
A company registration and Director IDs, if you set up a company.
Depending on your industry, you may also need licences or permits, so check what applies to your profession and your state.
Once you're up and running, a different set of ongoing obligations come into play, from consumer law to payday super for employers. I cover those in the compliance guide for running a small business in Australia.
Should I protect my business name before I launch?
At the very least, check it before you commit to it. Registering a business name gives you the right to use it, not exclusivity over it. Only a registered trade mark gives you exclusive rights to a name or logo for the goods and services it covers.
The costly scenario I see is when a business spends time, energy and money building a brand, a website and a following, then discovers someone else already holds a trade mark for a similar name in the same field. Rebranding at that point is painful and expensive.
Before you launch anything:
Search the business names register.
Search IP Australia's trade mark register for the same or similar names in your field.
Ask yourself honestly whether exclusivity matters to your business. If it does, consider applying for a trade mark early.
Remember that you automatically own copyright in the original content you create, from your website copy to your course materials. That protection is real, but it doesn't extend to your business name. More in trademarks and copyright: is it really yours? and The Atelier Guide to Copyright & Trademarks.
What legal documents do I need when starting a business?
For a service-based business with a website, three documents should be in place before your first client:
Business terms and conditions (your client service agreement): what you deliver, your fees, when you're paid, and what happens if something goes wrong. These must be tailored to how you work and comply with the Australian Consumer Law.
Website terms and conditions: the rules for using your website, your disclaimers, and protection for your content.
A privacy policy: how you collect, use and store personal information, even something as simple as a newsletter sign-up.
It's tempting, when you're new and grateful for every client, to skip the formalities. But when you don't set the terms, someone else does. Proper business legals are how you show clients you're a professional, set expectations clearly, and protect your worth.
And please don't copy someone else's terms or rely on a free template. A template will get you started; it won't get you out of trouble. DIY is for Bunnings, not for your legals. More in website documents: what small businesses need and The Atelier Guide to Your Business Legals.
Do I need business insurance when starting out?
Yes. Insurance is the third pillar of your risk strategy, alongside your structure and your legal documents. One of my mantras in business, and in life, is that something unexpected will always happen. And when it does, you want to be protected.
The insurance policies most small businesses should consider:
Professional indemnity, if you give advice or provide professional services.
Public liability, if you meet clients, attend sites or have people visit your premises.
Workers compensation, which is compulsory once you employ staff. The rules vary by state.
Cyber insurance, if you hold client data or take payments online.
Income protection, because your business depends on you.
My strong advice: speak to an insurance broker rather than buying an insurance policy online. A good broker will ask about how your business actually works and make sure you're covered for the risks you really face.
How do I make sure I get paid from the start?
Cash flow problems are rarely about a shortage of clients. In my experience, they come down to three things: unclear terms, inconsistent processes, and no plan for what to do when a client doesn't pay. All three are easy to address at the start, and much harder later.
Set clear payment terms in your client agreement: deposits, due dates, interest on late payments, and your right to pause work if invoices go unpaid.
Make sure clients accept your terms before work begins. Send them with your proposal, or use a click-to-accept step online.
Build simple systems. Use accounting software with automatic invoice reminders, and keep business money in a separate account.
Know your escalation steps before you need them, from a friendly reminder through to a letter of demand.
I cover this in helping creatives get paid, and in full detail in The Atelier Guide to Businesses That Get Paid.
What if I'm starting a business with a partner?
Get a written agreement before you start trading, not part way through. If you're a partnership, that's a partnership agreement. If you're co-owners of a company, it's a shareholders agreement.
A good agreement settles, in advance, the conversations that are hardest to have later:
Who contributes what, and who owns what.
How decisions are made, and what happens if you disagree.
How profits are shared and what each of you can draw.
What happens if one of you wants to leave, becomes ill or passes away.
How the business is valued and sold.
I have seen too many disputes tear apart friendships and families, and almost all of them could have been avoided with a clear agreement made while everyone was still getting along. If you're already in that situation, start with I've had a falling out with my business partner: now what?
What if I'm running my business from home or selling online?
Both are wonderful ways to start lean, and both come with a few extra things to check.
Working from home:
Check your local council's rules on home-based businesses, especially if clients will visit.
If you rent or live in a strata building, check your lease or by-laws.
Your home and contents insurance may not cover business equipment or business activity, so tell your insurer.
Work health and safety duties still apply, to you and to anyone who works with you.
Selling online:
The Australian Consumer Law applies in full. You need to understand your obligations, and what you can and can't do. For example, a "no refunds" policy is misleading, because customers always have rights when goods or services fail the consumer guarantees.
Your terms need to be accepted properly at checkout, ideally with a click-to-accept step.
You'll need a privacy policy, and your marketing emails must follow the Spam Act.
From 1 July 2027, new rules ban manipulative online sales tactics, require fees to be shown upfront, and make subscriptions easier to cancel.
More in run your business from home: the legal requirements and legal essentials for selling online.
Who should be on my team of advisers?
When you start out, it's easy to believe you have to do everything alone. You don't, and you shouldn't. Building a team of trusted advisers is one of the best things you can do for your business and your sanity.
At a minimum, that means:
An accountant, for your structure, tax registrations and financial systems.
A business lawyer, for your legal foundations and the bigger decisions as you grow.
An insurance broker, to make sure you're covered for the risks you really face.
Beyond that, work out your strengths, be honest about your gaps, and outsource. A virtual assistant, a bookkeeper, a business coach or a mentor can all give you back the time and headspace your business needs. Look for diversity of perspective, too: the advisers who see your blind spots are the ones who help most. My tips are in a legal checklist for engaging independent contractors.
As your business grows, the legal questions get bigger and come more often. That's when many owners move from occasional advice to fractional in-house counsel: a lawyer who knows your business and is there when you need them.
Look after yourself, too
Finally, please look after yourself. Your business depends on you, and it can't thrive if you're running on empty. Rest, boundaries and support aren't indulgences; they are part of a sound business plan.
Starting a business is one of the bravest things you can do. Set it up properly, and it will give back to you for years to come. Prevention is better than cure.
This article provides general information only and does not constitute legal advice. Your obligations depend on your specific circumstances.
Frequently asked questions
What is the best business structure for a small business in Australia?
It depends on your risk, growth plans and tax position. A sole trader structure is simplest but leaves you personally liable; a company can limit your personal liability but costs more to run. Get advice from your accountant and lawyer before you choose.
Do I need an ABN to start a business?
If you're carrying on a business, you'll need an ABN to register a business name, register for GST and invoice most clients. Applying for an ABN is free.
Do I need to register my business name?
Yes, if you trade under any name other than your own personal name. Business names are registered with ASIC.
Does registering a business name protect it?
No. Registering a business name gives you the right to use it, not exclusive ownership. Only a registered trade mark gives you exclusive rights to a name for the goods and services it covers.
What legal documents does a new small business need?
A service-based business with a website needs, at a minimum, business terms and conditions (a client service agreement), website terms and conditions, and a privacy policy, all in place before your first client.
