Startup Business Legal Essentials To Consider

Written by AMK Law

September 11, 2020

Startup Business Legal Essentials To Consider
If you are up and running with your new business, well done.
It is an awesome achievement to have set a business vision of exactly what you want to achieve, who you want to serve and what success looks like for you and your team.
It also means you will need to work harder than ever to build your dreams into a reality because there are a ton of tasks which need to be done, but it’s important that you remember the legal items involved.
When it comes down to it business is all about providing the best quality goods and services for your clients, having the appropriate level of stakeholder and team involvement and ensuring everything is done efficiently with the view to generating a healthy profit to fulfill your business vision.

Legal issues are particularly relevant at the beginning and growth stages of your business cycle, so the focus of this article is to give you insight into how to achieve the legal success you want to achieve in your business.


Start Up Business Legal Issues To Consider


There are so many exciting things that happen together when you start your business, so many things you can learn, such as business processes, customer service, marketing and design and much more.
Also, think about the legal details, too. We once heard a very wise lady say that any good business needs a fantastic lawyer to ensure that your legal affairs are handled well from the start.

Some legal issues for start up businesses include website terms and conditions, your service agreement, your product supply agreement and your shareholders agreement all done right for your business.


What Are Website Terms and Conditions


Nowadays it’s critical for your business to have a website.
Your website serves as your online shop front and your website terms and conditions are critical in setting down the rules for those people that are using your website.
Your website terms and conditions set out the conduct that is prohibited also sets out disclaimers and limitations of liability so that you and your business are protected if any of those issues arise.
You also need to consider online reviews and the relationship with your website and your consumers because reviews matter.

A majority of consumers will look at reviews before committing to a purchase. Therefore, it’s important that you respond to your reviews whether good or bad appropriately and within an acceptable time frame. Everybody loves hearing the good. But responding to negativity can be tricky, so be sure you do it right.


Do I Need A Service Agreement and Do I Need A Product Supply Agreement


One of the first protections you want to consider is making sure your products and services are legally protected. So the answer whether or not you need a service agreement and product supply agreement is…yes!
This is best achieved through having a well written service agreement or your product supply agreement for you and your business. Of course whether or not you need a service agreement, or a product supply agreement does come down to whether your business is a product based business, or a service based business.
Then it is important to get your agreement specifically tailored to meet your legal needs. Some of the key clauses to have in your product supply agreement needs to include specific details of the products that will be provided, when they are to be provided, the cost and pricing structure and liability of each party involved in the agreement.

Your agreement provides a degree of clarity and certainty to your business, as it will allow you to clearly know your rights and obligations, whilst also providing an avenue of enforcement in the instance that a dispute does arise.


Why You Need A Shareholder Agreement


It’s important that you have a Shareholders Agreement in place following a company set up.
Get it written as soon as you have more than one person involved as other director in control, or once you have more than one owner of your business as shareholders, in fact straight after incorporation is the best time to have your Shareholders Agreement in place.
Important business decisions and other crucial matters are set out in a Shareholders Agreement. Your Shareholder Agreement will set the scene from the outset and will keep your business on track should any disputes arise, such as differences of opinion, a founder wanting to exit the start up, or dealing with underperformance. Your Shareholder Agreement will lay out the foundations, intention, and business structure of your start up, and set the scene for the rights, responsibilities, and liabilities of each party.
By creating the Shareholder Agreement in the harmonious stage, at the early stages of the start up, before any conflict has arisen, or even been contemplated, there is clarity around how disputes can be managed. These Shareholder Agreement manage awkward topics like money and selling shares if a director decides to leave.
Shareholder rights are set out in the Shareholder Agreement, governance issues and responsibilities of directors are set out as well.

Legal Issues For Business Growth

Most businesses do fail in their first few years, it’s sad but true.
However, good news is after the three year mark you are much more likely to make your business a success. So, if you have got through the startup phase, congratulations to you, well done.
Now your start up phase was a success. As a business founder, you can now see the potential for rapid growth in your business. Now the key is to have the required legal work achieved to protect and secure your business growth and your future.

Some of the key legal requirements to consider in the growth phase of your business cycle include privacy policy requirements, contractor agreements, employee agreements and protecting your confidential information, together with your intellectual property as it is developed.


What Is A Privacy Policy


Most websites should have a privacy policy that sets out how personal information will be gathered, used and it’s worthwhile to have a privacy policy, to go alongside your website terms and conditions.
A Privacy Policy is a must for all businesses that turn over more than $3 million unless an exception applies.
The Office of the Australian Information Commissioner (OAIC) has released a useful guide setting out the legal requirements as well as the penalties in place for failing to comply with the privacy obligations. So make sure you do to avoid any government penalties.

You can read the OAIC’s Regulatory Action guide in case you would like any more information about the requirements. Breaching the Privacy Act (Cth) 1988 (Privacy Act) gives the OAIC wide powers including to investigate, take enforcement action and impose penalties for non compliance amongst other consequences.


What Is A Contractor Agreement


Another matter to consider, with your growing business is hiring people to help you out with all the tasks arising since you are likely to be getting busier and busier on a daily basis.

An independent Contractor Agreement is an agreement whereby you hire an individual or a company to complete services on a project-to-project basis, as an independent contractor or freelancer, not as an employee of your business. There are many considerations that need to be reviewed when considering these arrangements in your Contractor Agreement, so be sure to get advice on these.


What Is An Employment Agreement


Hiring your first, second and third employees are significant business decisions which do come up as being a part of the most exciting and significant steps in the growth phase of your business.
It is essential that you they comply with the legal requirements about your employees because breaches of employee obligations can lead to serious problems , so it’s important that you have Employment Agreements in place for those that you bring on as a part of your team to keep you on track.
Employment agreements will need to have essential clauses to cover details like salaries, leave entitlements, notice periods and process requirements, plus more.

In addition, intellectual property and confidentiality provisions are important to have in your Employment Agreements to be sure you have protected these important and valuable assets in your business as well.


What Are Confidential Information and What Is Intellectual Property


It is important for you to protect your Intellectual Property (IP) which arises from your business. This includes your trade marks, design rights, copyright, patents and your confidential information. This is because information itself is valuable information.
Some of the best ways to protect your confidential information from disclosure is by legal agreements, contracts and other forms of law.

Trade marks are protected at common law and can be registered pursuant to the trademark legislation and with IP Australia. Remember the kinds of intellectual property you might need to best protect include your business name, your branding, your logo, your website and its content, your domain name, any databases and confidential information, ideas and inventions you might have developed plus more.




Remember your business provides products and services to your clients with the view to earning a profit to meet your business and community goals. Having your legal requirements in place at both the start up phase, and the growth phases of your business cycle are particularly important.
There have been many cases where business leaders have found that their legal requirements have fallen short of what is required, and sometimes this comes at a very high price.

Prevention is better than cure, as they say. Especially when it comes to legal requirements, it is best to be on the front line to ensure that your Lego processes, contracts and obligations are all in place before any problems arise.


Boost Legal Templates 


Now Boost Legal Templates provides you with access to a variety of top-tier online legal templates to ensure that your business essentials are covered. We value effective solutions for our clients and understand your need for efficiency. Boost Legal Templates was created with the focus on providing an affordable, responsive and up-to-date document guide in real time.

For online solutions you can check out

If you have any questions or you do require further, personalise legal support, feel free to get in touch with us.

Important disclaimer: The material contained in this publication is of a general nature only and it is not, nor is intended to be legal advice. If you wish to take any action based on the content of this publication, we recommend that you seek professional legal advice.

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