Are you thinking of starting a business?
New Business Checklist
If you are, there are important factors you need to consider before committing yourself to anything:
Business plan & initial set-up
- Do you need a business plan?
Have a business plan and financial plan is essential to success. You may wish to speak to the bank to obtain a financial assistance if necessary.
- The structure of the business that is the best suited for the new business?
If your business is a company, register with the Australian Securities and Investment Commission (ASIC)
If your business is a partnership, create a formal partnership agreement, including a buy–sell agreement.
Register for an Australian Business Number (ABN)
- Register your business name if you wish to be known in a particular name by the general public as well.
- You will need an ABN, TFN, or register for GST or PAYG. Register for GST and PAYG, if applicable. If your turnover will be less than $75,000 per annum, you may not need to register for GST.
- Do you understand your taxation obligations for owning or running a business?
- Do you need staff or contractors? Do you know all of the employer’s responsibilities, e.g employee’s pay as you go tax and superannuation guarantees lodgments.
- You may need to consult with an accountant, lawyer, local council and other professionals to help you through the process of setting up a new business
- You will need an ABN, TFN, or register for GST or PAYG
- Check with the government and local council about necessary licenses or permits.
- Check with NSW Fair Trading or your professional bodies if you need to obtain an additional practice s or permits, e.g. NSW Fair Trading Licensing and The Law Society, etc.
- Join a trade association or chamber of commerce
Business Bank accounts:
After your business is set up, you will need to open new business bank accounts. Remember it is the best practice if you separate your personal banking from the business banking. This will save you a lot of time and money trying to sort out any confusions later.
- A business cheque account for everyday banking
- A high-interest account for surplus funds
- A business credit card for business-related purchase.
- Business borrowing: If your financial forecasts identified a need for borrowings, apply for a loan or line of credit. Again, a business banker can helpSet up your financial record keeping system is important, including an invoicing system and cash flow tracking system. Is cloud accounting a good idea for you?At the end of each quarter (for BAS clients) and end of the financial year, you are required to summarise all of the business income and expenses and complete the income tax return.
- You will need to keep all of your business records for the minimum of 5 years.
- Does the software provide payroll and GST function?
- You may use an accounting software or your accountant’s bookkeeping help.
- What record-keeping method you will be adopting?
Legal requirement and leasing
- Arrange for business insurance, including public liability, vehicle, fire, burglary, professional indemnity and sickness
- Choose premises, then negotiate a lease or purchase agreement in consultation with your solicitor
- Arrange for connection of utilities such as electricity, water, telephone and gas
- Arrange fit out and purchase business equipment, fittings and furniture
- Buy stationery and office supplies
- Buy supplies or trading stock and determine terms of payment, delivery and freight
- Start of employment:
You may have tax and superannuation obligations if you employ or contract workers into your business, either full-time or part-time. You must provide employees a Tax file number declaration on their first day of work.
- Pay slips:
On payday you will need to determine the rate of tax that you need to withhold from payments you make
- Paying Pay As You Go (PAYG) withholdings to ATO
Most wage reporting and PAYG payment responsibilities occur when you complete and lodge your activity statement, usually monthly or quarterly.
- Termination of employment
- If the employee is eligible for an employment termination payment (ETP), you will have additional PAYG withholding obligations.
You must make super contributions for an employee if you’re considered an employer for super guarantee purposes and your employee is entitled to the super guarantee. At the present the super guarantee rate is 9.5% of the gross income.
Super guarantee payments are due quarterly are 28 Oct, 28 Jan, 28 April & 28 July.
Shortfall interest charge and fines apply for non-payment and late payments.
Late super contributions and the super guarantee charge are not tax deductible.
The above is overwhelming! We recommend you seek professional assistance before spending your money. It is important to be well-prepared and not to miss any steps.
It is time consuming to keep up with the ongoing taxation requirements. Failure to meet any of the tax obligations can cost you a great deal down the track. It is worthwhile getting things done professionally on the regular basis. A good tax advisor can save you a fortune as well.