Why start-ups and small businesses must fulfil their legal requirements

One of biggest things that us small-business owners forget the most is that, whether we like it or not, the buck stops with us – and ignorance is no defence. Most people get completely blindsided when there’s a legal issue because they’ve left their business open to either attack by not having tailored legal documents in place, or the right structure to protect their personal assets, or appropriate waivers/disclaimers. What we’ve seen largely gives me the heebie jeebies!

One thing that I’ve been using to illustrate to clients about the importance is to think that if a consumer/client/customer takes you to court, unless your terms and conditions are absolutely clear and unambiguous, you’re more likely than not to lose. That’s because the courts and tribunals are very heavily in favour of consumers or employees when a matter comes before them.

The harsh reality is that if a tribunal member or a magistrate/judge sees your terms and conditions or your workplace agreement and the relevant clauses are vague, unclear or, even worse, silent, then they’re going to side against you. It’s almost a reverse onus of proof. We have to prove whether we have made adequate and proper disclosure, what gives us the legal rights, why a judge/magistrate/tribunal member should find in our favour as opposed to the protected person. It needs to be clear, precise and nothing misleading, confusing or contradictory.

That’s what people don’t realise. You need all your “ducks in a row”. All your documents need to be compliant with all relevant laws. They need to be tailored for your business and cover you for what you are doing.

This brings me to a really important point. Why have legal documents in place that aren’t tailored for your business? Most templates provide little coverage for what you’re exactly doing and every business is different, even those in the same industry. It’s more often than not, the actual clauses that need tailoring are the most important and fundamental ones.

The law requires small-business owners to comply on a number of fronts, and quite frankly, it feels like a minefield. We’re constantly having to guide small businesses through it. Whether it’s particular industry regulations, Australian Consumer Law (ACL) or the hundreds of acts that apply.

After helping over 1500 start-ups and growing small business over the last four years I see this, unfortunately, as is one of the biggest problems that business owners face. The “she’ll be right mate” Aussie mentality lands so many in hot water. Some of them are even business-ending mistakes. Some are even worse and expose their personal assets by trading as sole traders. They’re playing a figurative game of Russian Roulette with their business. It’s mind-boggling.

We need to change that perception, and fast. Lawyers are such a great asset to have to a business owner. They bring legal risk management, a wealth of advising other businesses, lateral thinking and a balanced view from an independent advisor that can critically examine the issues and get to the crux of the matter. That’s what we’re trained to do. Having an experienced and affordable lawyer that understands your business can be invaluable, just like having a good accountant that understands likewise and can advise you quickly when you need to make quick but good business decisions in this modern online, fast-paced environment. But that’s a story for another time.

Ian Aldridge, Founder and Lawyer, Progressive Legal

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