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These are the top three legal mistakes you need to avoid when starting a business


The life of a start-up can be precarious, a wrong turn disastrous.

With all the action related to start-ups these days, it’s easy for an entrepreneur to forget the legal aspects while focusing on getting the business off the ground. There are plenty of legal mistakes made by really smart entrepreneurs and start-up companies.

Whether you are just starting a new business or have been running a business for years, everyone wishes they checked off these top three issues which consistently arise which can affect your business and its sustainability.

1. It’s all in the name (trade mark infringements)

Choosing a business name is one of the most exciting parts of developing a business. It gives your business identity, personality and allows you to develop a brand.

Before committing to a name and sending the brief off to the designers and request to the accountants to register the name, you should confirm your proposed name does not infringe on another company’s rights or trade mark.

There are two quick and simple searches which can be undertaken to be sure your name is available. An ASIC search will tell you whether your business/company name is available or similar to another. A trade mark search will allow you to take a precursory review on whether your business/company name infringes on someone’s trade mark.

Facing a cease and desist letter from a trade mark holder, either upon launch or immediately following launch of your brand, will soon see your business go from its highest point to its lowest.

2. Business structure

Choosing the right structure for your business is critical for a number of reasons:

  1. it determines your risk exposures;
  2. It sets the scene for your growth goals and ambitions; and
  3. It determines your legal and financial obligations and reporting requirements.

With a number of choices in how to structure your company, directors should follow the three steps to assist in deciding which structure is right for you:

  1. Be clear about your vision
  2. Asses your liability and risk exposures
  3. Seek legal and accounting advice

Failing to choose an appropriate structure from the outset can impact your business’ growth plans and goals and your risk and liability exposure. Its best to ensure you get the structure right from the beginning.

3. Be employee ready

Hiring employees is both a challenging and integral part of business. There are a series of key considerations to employing employees for your business. Many business fail to adequately prepare for employees and fail to ensure they comply with employment law intricacies such as:

  1. Worker Compensation
  2. Payroll Tax and PAYG
  3. Superannuation
  4. Workplace Health & Safety procedures and policies

It is important to obtain both legal and accounting advice to ensure you are fulfilling your obligations as an employer.

All entrepreneurs and business owners should use these three very simple tips to avoid the most common legal mistakes to effectively establish and grow your business.

An accomplished entrepreneur and lawyer, Demetrio Zema has worked with many corporates, SME’s, entrepreneurs and ASX companies. Having founded and co-founded six businesses, he has firsthand experience and knowledge in the issues faced by entrepreneurs. Since launching Law Squared in February 2016, Demetrio has been awarded one of the winners in the 2016 Lexis Nexis Innovation Index, and the firm named “Australia’s most innovative law firm” in the Huffington Post. Demetrio is also an active participant in the not for profit community particularly as Director for the Centre for Multicultural Youth, Board Sub-Committee Member of VicDeaf and co-founder of If Not Now Then When Foundation.

Demetrio Zema, Law Squared