Deal with legal and tax obligations

The Australian Securities and Investment Commission (ASIC) lists the legal and tax requirements for each business structure under Australian law. For example, a limited-liability company must:

• lodge an annual company tax return
• register for GST if its annual revenue is $75,000 or more
• pay tax at the company tax rate
• pay superannuation guarantee contributions for all eligible workers.

Company directors have their own responsibilities. If they are not met, there can be personal criminal liability. They include:

• acting honestly and carefully at all times
• remaining fully aware of the company’s activities
• taking extra care when handling other people’s money
• paying debts on time
• keeping proper financial records
• acting in the company’s best interests, even if they conflict with your own interests
• never using any business information to gain an advantage for yourself or anyone else, or to harm the company.

Company directors’ legal responsibilities are serious. They are almost certain to impact you as a start-up founder. We recommend formal education about these responsibilities, like the Australian Institute of Company Directors offers. You should do this before your start-up accepts major investment.