From startup to success – 5 key legal considerations for growing your business

Ready to take your business to the next level? As you gear up for expansion, it’s critical to ensure you have the legal foundations right for your business.  This blog will delve into five key legal considerations to ensure your business is set up for seamless growth.

Structuring right for expansion

Expanding your business requires careful consideration of its structure. Perhaps you didn’t think much about your structure when you initially launched. Before growing, it’s vital to give this some attention and ensure you’ve got the right business structure.

A business structure is the legal arrangement from which you provide your products or services. New Zealand's most common structures are sole trader, company or partnership. Trusts are also an option but are not common as trading entities in New Zealand. Each comes with its own legal implications, including set-up requirements and ongoing obligations (including tax).  A sole trader is the simplest and easiest to manage structure, but this doesn’t provide asset protection for the owner and doesn’t work if you have business partners.

Ensuring you are complying with the rules

Regulations vary across industries and jurisdictions, and for most businesses, the risks associated with non-compliance become more significant as the business grows. From obtaining permits and licenses to adhering to industry-specific regulations or consumer protection legislation, ensuring compliance is essential for smooth expansion.

Building your team, legally

As you hire new staff to support your growing business, doing it right from the start is essential. Understanding the difference (and why it’s important) between employees and independent contractors is paramount. Having clear written employment agreements (that comply with current employment laws) or independent contractor agreements, and implementing tailored workplace policies, ensure a harmonious work environment, clarify expectations, avoid potential disputes, and mitigate legal risks.

You need to become familiar with (or ensure you have someone on your team who is) New Zealand’s employment laws, such as minimum wage, health and safety, and holidays.

Protecting your intellectual property

Don’t spend $0000s on branding unless you have secured the right to use your trading name. Ideally, this should have been done before you set up the business, but it may not be too late! A company name or registered business name does not give you the exclusive right to use that name and doesn’t give you the right to prevent others from using a substantially similar name. To gain this protection, you must register your business name as a trade mark in each country you intend to trade in.

If you have other valuable intellectual property, such as inventions, unique processes, or artistic or literary works, you need to consider how to best protect it from being exploited by your competitors.

Documenting your deals

Whilst you may have relied on handshakes and reputation until now, you’ll need to think about more ‘water-tight’ ways of protecting your revenue (through agreements with customers), supply chain (through agreements with suppliers) and arrangements with business partners (through shareholders agreements).  There will also be legal documents you must have in place by law, such as a privacy policy.

Clear contractual agreements are the foundation of successful business relationships. They ensure smooth collaborations and mitigate risk. Good contracts outline rights, obligations, pricing and payment expectations, dispute resolution mechanisms, liabilities, and exit provisions if things don’t go to plan.

The journey from business startup to success is exhilarating, but it's often not without legal complexities. By carefully addressing these five key legal fundamentals— choosing the right business structure, regulatory compliance, understanding employment laws, protecting your intellectual property, and documenting your business arrangements—your business will be well-equipped for growth. RWA is here to help you tackle these essentials – please get in touch for a free initial no-obligation discussion about how we can best help.