Your guide to small business compliance

There used to be a time when only the big corporate types at the top of town used to have to worry about compliance and risk management. Small business owners could simply set up shop and get stuck into it. However, the issue with this model was that it left small business owners and their employees vulnerable.

That’s why today’s small business owners need to become compliant before they even open their doors (figuratively or literally) and must remain that way or else they may face legal action and/or substantial fines.

Our guide to small business compliance will help you understand where to start and how to stay compliant.

What is small business compliance? 

When you start up a small business, you need to make sure you and your business understand any and all applicable laws. You must also comply with the related legal and regulatory requirements in your state of territory. 

If you log onto the Australian Government Business website, it says:

‘Business compliance is the process of making sure your business and employees follow the laws, regulations, standards, and ethical practices that apply to your business.’

Still unsure where to begin?

Business registration 

If you decide you want to run your own small business using a name other than your own, you need to register the name with Australian Securities and Investments Commission (ASIC).

To make this all a bit simpler, you can use the Business Registration Service which combines several business and tax registrations in one place, making it even easier to start a business. You can apply for an Australian Business Number (ABN) and register your business name online.

To fulfil tax responsibilities, you may need to register for:

• Australian business number (ABN) – this number identifies your business but doesn’t replace your Tax File Number (TFN)
• Goods and Services Tax (GST) – applies to most goods and services sold in Australia
• Tax file number (TFN) – if you’ve ever worked and paid taxes, you already have a TFN
• Pay as you go (PAYG) withholding – if you pay employees

Tax compliance 

May as well rip off the band aid and get it over with. When running a business, you’ll have to pay taxes. We know, not the most glamorous side of business, but a necessity nonetheless. Because if you make mistakes, this causes headaches for everyone. Plus, you may have to pay fines. 

The Australian Taxation Office (ATO) says:

There are around four million small businesses in Australia.

They employ around five million Australians and contribute around 30% of all income tax collected.

That’s about $85 billion.

And the ATO wants you to get it right so they suggest when it comes to tax compliance:

• Use a tax professional (we have lots of specialist tax consultants we can recommend!)
• Check your business structure
• Keep good records
• Get your income and expenses sorted.

Believe it or not, everyone, including the ATO, wants you to get your taxes organised properly. They don’t want any hassles or the need to do a tax audit.

Fair Work

Looking after your employees and providing a safe and fair working environment, that is working at best practice, is something every employer should strive to achieve. As an employer, you’ll need to provide minimum conditions and pay and you’ll be required to maintain and keep certain records.

What is best practice? 

It’s understanding and meeting your obligations under Australian workplace laws. It’s not just meeting them, it’s going above and beyond to make your workplace thrive and grow. 

To help you out and make it easier for everyone, Fair Work offers a range of tools and resources including a small business best practice guide. The guide explains your basic obligations under the Fair Work Act and how you can take a best practice approach to employment and workplace issues.

You’ll need to understand The National Employment Standards (or NES) minimum standards for all employees and the award for the minimum wages and conditions for an industry or occupation. Awards usually have rules about:

• which industry and occupations they cover
• pay
• work hours
• rosters
• leave and breaks
• allowances
• penalty rates
• overtime

Licences and permits

Depending on your business, you might need some business licences, registrations or permits. These can differ from state to state. You can head over to the relevant authority in your state to find out exactly what you need to keep your small business complaint.  

Service NSW

Business Victoria

Business Queensland

Northern Territory Government

Tasmanian Government

Government of South Australia

WA Small Business Development Corporation

Work, health and safety (WHS) 

An employer has to not only provide fair wages and working conditions, but they also need to ensure the safety of their employees, and anyone else who works for them or comes into contact with the business. 

You will need to check the requirements in your state as to what level of cover is needed for your business.

Fair Trading 

Treating employees and staff properly is just the beginning. A small business also has to comply with codes of practice and laws regarding fair trading in the marketplace. If you’re business is in New South Wales, check out NSW Fair Trading for more information and if you sell services or products, you may also be interested in:

• Australia's trade measurement laws
• displaying prices
• product labelling
• secure card payments
• warranties and refunds

Use a small business compliance checklist 

To ensure your business remains compliant year after year, implementing a compliance checklist could help you keep on top of things. The Australian Government Business site has a start-up checklist and a companion checklist listing all the state and territory government agencies you’ll need to access for compliance.

You’ll find lots of compliance checklists online that can, with a bit of tweaking, be made to fit your small business compliance needs perfectly. 

As we said at the beginning, our guide to small business compliance doesn’t cover everything. Wherever you are in your business journey, we’re here to help you be better off. 

If you have any questions about business compliance or are keen to get started on a compliance and risk plan, please get in contact with your Client Director today. Not a Kelly+Partners client? Click here for a discovery meeting today.