You can legally run a small business from home in Australia, but check a few things first: whether your council, lease or strata by-laws allow it, that your insurance covers business activity at home (home and contents policies often don't), how you'll keep client information secure, and your work health and safety obligations if you have staff working from home. Then update your business address with ASIC, the ABN register, your insurer and any licensing bodies.
These days, working from home has become more accepted and, for many employees and business owners, more appealing than commuting to an office every day. There are many pluses, with balance, productivity and wellbeing often at the top of the list.
But is it as easy as setting up your laptop on the dining room table? Or are there other things business owners need to think about? In this article, I share the legal must-haves when running a small business from home.
1. Check you're allowed to run a business from home
Most home-based businesses that don't change the character of the home (like consulting, online or professional services) are fine. But if you'll have clients or customers visiting, staff on site, signage, deliveries, noise or stock stored at home, check with your local council, as you may need approval.
If you rent, check your lease, and if you live in an apartment or townhouse, check your strata by-laws. Both can restrict running a business from the property.
2. Design your space
A space that welcomes you each day and helps you feel calm, happy and motivated, but is also safe and ergonomic, is vital for long-term sustainability. Here are some ideas my clients use:
Set aside a designated space. Whether it's a corner of the living room, a spare bedroom or part of the garage, having a space that's yours for running your business helps you focus and work safely.
Keep it clutter-free. Keep your work area free from cords and other hazards, with a properly set-up desk and chair and a place for your computer that follows good ergonomic practice.
Eliminate distractions. Keep the space as distraction-free as possible by removing unnecessary objects and technology.
Source the right equipment. Do you need an ergonomic office chair, a standing desk or a particular headset? These items are an investment, but an efficient and safe set-up will serve you in the long run.
3. Insurance
Yes, you need this. You need insurance in business whether you work from home or an office, but your needs may vary depending on where you work. Don't assume your home and contents policy covers your business equipment, stock or business activities, because many don't.
Check with your insurance broker about your specific needs, then make sure your cover is in place and kept current.
4. Think about client meetings
Will you meet clients and team members online (such as on Teams or Zoom), or will you invite them to your home?
If people will come to your home for business, talk to your insurance broker about public liability insurance. This is a big must-have, and it should be in place before anyone attends your home for business.
5. Think about your employees
If your employees also work from home, you have an obligation as an employer to provide a safe working environment. Work health and safety laws require workplaces to be, as far as is reasonably practicable, physically and mentally safe and healthy for all workers, and that includes a home office. This one can be tricky, so get specific legal advice.
Next, talk to your insurer about your cover, as your workers compensation policy may have specific requirements for team members working remotely.
Then put in place a working from home policy, and make sure your employment agreements include remote working provisions. Done properly, these will cover working hours and output, communication and other expectations, as well as each party's safety obligations. Work health and safety laws place obligations on both employers and employees, so support your team members to set up properly at home, so the arrangement is sustainable for everyone.
Some employees also have a right to request flexible working arrangements, including working from home, and you must respond to a request in writing within 21 days.
Tip: If a role needs specific internet upload and download speeds, include them in the job description.
6. Protect your data and check your tech
Check your internet and computer set-up before you start, and check in with your team to make sure everyone has what they need to do their jobs properly. This helps you manage your risk around client work and deadlines, so you're not exposed if the internet goes down.
Working from home also means client information is on your home network and devices. Use secure passwords and multi-factor authentication, keep software up to date, and back up your data, so you meet your privacy and confidentiality obligations.
7. Update your address
If you're moving from an office to working from home, update your address with any licensing bodies, your insurer, ASIC and the ABN register, and let your lawyer, bookkeeper and accountant know. Companies must tell ASIC about a change of registered office or principal place of business within 28 days. Keep in mind that some of these addresses can appear on public registers, so think about whether you want your home address listed.
It's also worth talking to your accountant about the tax side of working from home, including what you can claim and any capital gains tax implications for your home.
If you have questions or would like advice on setting up your business from home, book an introduction call.
This article provides general information only and does not constitute legal, tax or financial advice. Your obligations depend on your specific circumstances.
Frequently asked questions
Do I need council approval to run a business from home?
Often not, if your business doesn't change the character of your home. But if clients visit, staff work on site, or you have signage, deliveries or stock, check with your local council, as you may need approval.
Does my home insurance cover my home business?
Often not. Many home and contents policies exclude business equipment, stock and business activities. Talk to your insurance broker about business insurance, and public liability cover if clients will visit your home.
Do I have work health and safety obligations for employees working from home?
Yes. As an employer, you must provide a safe working environment, as far as is reasonably practicable, including at an employee's home. A working from home policy and remote working provisions in your employment agreements help you manage this.
