U2 AOS1 KK1 Legal Requirements

Question 1

What are 5 legal requirements when establishing a business?

Answer 1

1. Registering a business name
2. Registering a website domain
3. Trade practices legislation
4. Business Tax Compliance
5. Worksafe insurance

Question 2

What are the 3 steps for registering a business name?

Answer 2

1. Select an appropriate business name (check if available).
2. Obtain an ABN (and ACN if using a company structure).
3. Register the business name with ASIC.

Question 3

True or False:
Registering a domain name is a legal requirement regardless of whether you intend to have a website or not.

Answer 3

False.
Registering a domain name is only a legal requirement if you intend to have an online presence (website).

Question 4

List 3 considerations when choosing a domain name.

Answer 4

1. Choose a domain name to match your business name so customers can easily find your business online.
2. Choose a domain name that is easy to spell.
3. Choose a domain name that is easy for customers to remember.

Question 5

What is the name of the Act that promotes fair trading between businesses and ensures that customers are treated fairly?

Answer 5

Competition and Consumer Act 2010 (Cth)

Question 6

What does ACCC stand for and what is its primary responsibility?

Answer 6

Australian Competition and Consumer Commission.

Primary Responsibility: To ensure that individuals and businesses comply with the Competititon and Consumer Act 2010.

Question 7

Price Monitoring - Competition and Consumer Act

What is ‘price fixing’?

Answer 7

It is illegal for competing businesses to get together and agree to fix their prices (or agree to charge certain fees).

Question 8

Price Monitoring - Competition and Consumer Act.

What is ‘imposing a minimum price on retailers’?

Answer 8

It is illegal for suppliers to attempt toset a minimum pricefor their products or services that retailers can’t sell below.

Question 9

Price Monitoring - Competition and Consumer Act.

What is ‘selling goods below cost’?

Answer 9

Selling goods at a below-cost price is usually ok, however it may be illegal if it is done for the purpose of eliminating or substantially damaging a competitor. This is known as predatory pricing.

Question 10

What is company tax?

Answer 10

Tax payable on company profits.
25% if turnover < $50 million
30% if turnover > $50 million

Question 11

What is PAYG/PAYE Tax?

Answer 11

Personal income tax payable by employees.

PAYG = Pay as you go
PAYE = Pay as you earn

Businesses must keep the correct amount aside and forward to the ATO on behalf of employees.