Buying a Business in Australia

It’s Important to Understand Your Employer Obligations First    

If you’re looking at buying a business in Australia, there are a few things you will want to understand if the business for sale in Australia requires you to hire employees.  

As an employer, you have certain obligations to members of your staff, regardless if the business you buy is a business for sale by owner, a private business sale, or even a franchise opportunity. These obligations are set forth by federal, state/territory laws, industrial agreements, tribunal decisions, and even verbal and written contracts of employment.    

Legal obligations

Your legal obligations to your employees require you to:  

• Pay correct wages
• Reimburse employees for work-related expenses
• Ensure a safe working environment
• Forward PAYG tax to the appropriate Tax Office
• Make appropriate payment under the Superannuation Guarantee legislation    

Record-keeping

If any of the members of your staff are employed under a federal award or agreement, you will be required to records of their time and wages and issue pay slips to the employees. These records will need to be kept for seven years.  

You will also be required to record and explain all transactions, as specified in tax law.    

Keeping Your Employees Safe and Healthy

As the owner of a business in Australia, you will be expected to comply with Australia’s Occupational Health and Safety (OH&S) laws. You will need to have a thorough understanding of these laws and your obligations, as well as the OH&S Acts, Regulations and Codes of Practice. OH&S laws also detail your responsibility regarding accidents and injuries and workers compensation requirements.    

Taxes

Business owners in Australia must also comply with tax and superannuation obligations. To assure you do his, you will first need to determine the status of your various employees because your obligations to your employees will vary based on their individual status.  

You will be required to register each of your employees (and contractors if this applies) and withhold taxes from their wages, which you will pay to the Tax Office.  

Likewise, for any employees that are eligible, you will also be required to make superannuation payments and for those who your business provides fringe benefits, you will be required to pay the applicable Fringe Benefits Tax to the Tax Office.  

Additionally, if the wages you pay your Australian employees exceeds the exemption threshold that applies in your state or territory, you will also be required to pay Pay-roll Tax, which is a state tax on the wages paid by Australian employers.    

Insurance

As the owner of an Australian business, there are two types of insurance you are required to maintain:  

Workers compensation insurance
Public liability insurance  

Workers compensation insurance: This type of insurance protects you and your employees from financial  difficulty caused by a workplace injury.  

Public liability insurance: This type of insurance protects you and your business from the financial liability you could face if found responsible for injury (or death) to a third party, loss or damage of property or ‘pure economic’ loss resulting from your negligence.  

Additional insurance requirements will vary based on the type of business you own in Australia. While some will be required, some will not, but you may find that even those not required are important to protect yourself and your new business.  

There is even insurance for home-based businesses that you will want to familiarize yourself with in the event the business you buy will be run from your home.    

Additional Resources

As the owner of a business in Australia, there is an array of resources available to you, including how-to guides, start-up advice and essential business information at: http://www.business.gov.au/Business+Entry+Point/ , where you will also find the latest news and announcements and unlimited access to all the government information, transactions and services you need to make sure you start your new business off on the right track, and keep it there.  

Most recently, an invaluable New To Business Checklist has been added that you can download. This comprehensive checklist, provides important information from all levels of Australian government, and ensures you have instant access to the most up-to-date information.  

You will want to download and thoroughly review this checklist when you buy an Australian business or in the event you start a new business in Australia.