Should you sign that? Legal advice to protect your small business

Paul Gordon, senior associate of NDA Law, answers six commonly asked legal questions from small business owners and advises when to trust your instincts and when to get professional advice.

1. “Legally, what should I be protecting?”

Gordon's advice: “The first thing small businesses should consider is how they're structured. Whilst there are benefits to being a sole trader, a significant issue is your personal liability (so if something goes wrong, it’s your assets on the line). Another issue that small businesses often face is protecting their intellectual property (IP), whether that be a brand, a registered design, or even just the copyright associated with their website. Keeping a keen eye on your IP can help you cement your brand.”

Essential links:
Understand liability insurance 
Search, register and commercialise your IP 

2. “I haven't dealt with anything legal yet. What sort of docs will I see down the track?”

Gordon's advice: “For a small business, often the most frequently seen document will be terms and conditions. These are contracts associated with almost every good or service purchased by a small business. [For example,] your purchases are subject to terms of sale which are vital to understand. Often you have to go looking for terms and conditions. They could be attached to a quotation, in the fine print in a catalogue, or only available if you click a link on a website. Whilst it’s not practical to read all of a contract every time - for example, Amazon’s terms of service take 9 hours to read out aloud! - it's essential that you understand your rights and responsibilities related to a purchase.

“The other type of legal document small businesses might come across is legislation. The Competition and Consumer Act (and the associated Australian Consumer Law) is an important document to be familiar with, firstly as it could impose obligations on your business, and secondly because it might grant your business rights when dealing with larger companies.

Essential links:
The Competition and Consumer Act

Have you protected your intellectual property yet?


3. “I don't think I can afford a solicitor. Are there any government or free legal services?”

Gordon's advice: “This will depend on what kind of legal issue you have. For workplace issues, often your local chamber of commerce will offer advice for members. The Small Business Commissioner can be helpful if you have a dispute, whilst the ACCC (Australian Competition and Consumer Commission) can assist with matters involving consumer protection. At the end of the day, though, getting good legal advice can sometimes mean paying a lawyer, as this is the best way to get tailored, relevant information.” 

Essential links:
The Australian Small Business and Family Enterprise Ombudsman 

Senior Legal Associate Paul Gordon


4. “Do I actually need a lawyer on call?”

Gordon's advice: “Having a good relationship with a solicitor is important for any business. It’s important that you find a lawyer who understands your business, is available to take your calls and who can provide you with strategic legal advice to avoid problems arising in the first place. Whilst legal services are not always cheap, many firms are now offering fixed fee services and free initial interviews, so it’s worth asking about fee arrangements when you first engage with a lawyer.”

Essential links:
The National Directory of Legal Practitioners

5. “When can you trust your own instincts with signing or agreeing to something, and when should you get legal advice?”

Gordon's advice: “This is all a matter of risk appetite. If it’s a relatively small contract in the context of your business – e.g. buying paperclips – probably trust your gut. If the purchase or sale is for a high monetary value, or if it involves something unusual or risky, then it’s probably time to call your lawyer. If in doubt, give your lawyer a call.”

Essential links:
ACCC Unfair contract terms 

6. “What sort of legal problems might come up?”

Gordon's advice: “One of the most common issues that small businesses get into is a failure to document relationships. Whether it’s contracting services from a friend, or starting a business relationship with a trusted colleague, a failure to have everything documented when the relationship is positive can lead to massive headaches if the relationship sours.”

Essential links:
Fair Work Ombudsman: Hiring employees Taking on an employee checklist

The small business commissioner (or similar) in your area is a useful source of support and their website is a great starting point if you're after legal advice for your business.

- The NSW Small Business Commissioner
- The VIC Small Business Commissioner 
- The QLD Small Business Champion 
- The NT small business services 
- Access Canberra 
- Business Tasmania 
- The WA Small Business Commissioner 
- The SA Small Business Commissioner

This advice is of a general nature. Please speak to a qualified solicitor or legal adviser for advice tailored to your individual circumstances.