Obligations as a Business Owner
As a business owner or director, you are obliged to comply with the following as outlined by State and Federal legislation:
c Register your business name.
c Register your business name.
c Register your company name with the Australian Securities and Investments Commission.
c Register for an Australian Business Number with the Australian Taxation Office.
c Open up bank accounts in the business name.
c Register for the relevant taxes, including GST and PAYG.
c Obtain information on your Superannuation obligations and organise with your accountant / specialist your own superannuation requirements.
c Obtain information on awards, workers compensation, PAYG taxes, as well as other relevant employment information.
c Decide how payroll will be processed and managed (either by yourself using an appropriate payroll software or outsourced to a payroll management company).
c Check what other licences/registrations may be required for your business.
c Draw up your Will, especially if you are a sole trader or director.
c Join a trade association/chamber of commerce or employer association
c Display the company name, the Australian Business Number (ABN) and the relevant number on all official documents.
As a director, you also need to follow the requirements set out in the Corporations Act 2001. The Australian Securities and Investments Commission (ASIC) is the company law watchdog and enforces the conditions of the Corporations Act.
At times you may need professional legal advice. Please note that even if you appoint an agent or use a consultant to look after the company’s affairs, you - not them - may still be held responsible for those legal obligations.
What does the law expect of you personally?
As a director, you must:
- Be honest and careful at all times.
- Know what your company is doing.
- Take extra care if your company is operating a business because you may be handling other people’s money.
- Make sure that your company can pay its debts.
- See that your company keeps proper financial records.
- Act in the company’s best interests, not just in your own interests, even though you may have set up the company just for personal or taxation reasons.
- Use any information you get through your position properly and in the best interests of the company. It is a crime to use that information to gain, directly or indirectly, an advantage for yourself or for any other person, or to harm the company. This information need not be confidential; if you use it the wrong way and dishonestly, it may still be a crime.
- Adhere to the conditions, rules and regulations of all legislation, codes of conduct and the franchise agreement.
What work must a director do?
You and any other directors control the company’s business. You must be fully up to date on what your company is doing:
- Find out for yourself how any proposed action will affect your company’s business performance, especially if it involves a lot of the company’s money.
- Get outside professional advice when you need more details to make an informed decision.
- Question managers and team members about how the business is going.
- Take an active part in directors’ meetings.
Only be a company director if you are willing to put in the effort. You could be exposing yourself to many legal liabilities.