Starting a business in Australia? Here’s the real talk on contracts you actually need (and why skipping them could bite you later).
Let’s be honest. Legal stuff is boring. Contracts? Ugh. Sounds like something you’d rather leave to the suits while you build your dream startup in a garage with a beanbag and a whiteboard. But here’s the thing: contracts are the duct tape of your business. They hold everything together when things get messy. And trust me, things will get messy.
I’ve been blogging about startups, compliance, and digital workflows for years. I’ve seen founders lose sleep (and money) over missing NDAs, vague employment terms, or handshake deals that went sour. This is why our experts recommend enlisting a contract lawyer to ensure that your business is compliant and protected in all regards. So I’m here to help you skip the drama and get your legal ducks in a row—without sounding like a textbook.
Let’s dive in.
Contents
What Legal Contracts Does Your Australian Startup Actually Need?
1. Do You Even Exist? Business Registration Docs
Before you sell a single product or hire your cousin as a marketing intern, you need to register your business. This isn’t just paperwork—it’s your startup’s birth certificate.
Why it matters:
You get an ABN (Australian Business Number), which is like your business’s passport.
You’re officially recognized by ASIC (Australian Securities and Investments Commission).
You can open a business bank account, register for GST, and not get side-eyed by the ATO.
What you’ll need:
Proof of identity
Business structure (sole trader, partnership, company, trust—pick wisely)
Legal business name
Tax File Number (TFN)
Licenses or permits (depends on your industry)
Activity descriptions (what you actually do)
Pitfall alert: Choosing the wrong business structure can mess up your taxes, liability, and funding options. Talk to a lawyer or accountant before you commit.
2. Employee Contracts: Not Just for Big Companies
So you hired your mate to help with sales. You trust him. He’s chill. But what happens when he wants equity? Or takes your client list to start his own gig? No matter how good your relationship is with prospective employees, the necessary staff agreements establish the rights, duties, and remuneration of each employee.
Why you need contracts:
They define job roles, pay, leave, and termination rules.
They protect you if things go south.
They help you comply with Fair Work Australia standards.
Types of employment contracts:
Type
Best For
Key Legal Considerations
Full-time
Long-term hires
Leave entitlements, super
Part-time
Flexible hours
Pro-rata benefits
Casual
Seasonal or ad-hoc work
Less job security
Contractor
Freelancers, consultants
Must avoid misclassification
Common mistakes:
Mixing up contractors and employees. The ATO hates that.
Forgetting to include IP clauses. Who owns the code your dev wrote?
3. Partnership Agreements: Because Friends and Business Don’t Always Mix
Starting a business with your bestie? Great. But get it in writing. Seriously.
What to include:
Roles and responsibilities
Investment amounts
Profit/loss sharing
Exit strategy (what happens if someone wants out?)
Real talk: I once saw a startup implode because one founder wanted to pivot to crypto while the other wanted to sell eco-friendly socks. No agreement. No plan. Just chaos.
4. Vendor & Supplier Contracts: Don’t Let Your Supply Chain Ghost You
You found a supplier who promises fast delivery and low prices. Sweet. But then they miss deadlines. Or raise prices. Or disappear.
Why contracts matter:
They lock in pricing, delivery terms, and quality standards.
They give you legal recourse if things go wrong.
What to include:
Payment terms
Delivery schedules
Dispute resolution clauses
Termination conditions
Pro tip: Always include a clause for late delivery penalties. Your customers won’t wait, and neither should you.
5. NDAs: Because Loose Lips Sink Startups
You’re pitching your idea to investors, freelancers, or potential partners. You’re sharing your secret sauce. But what if they steal it?
Enter the Non-Disclosure Agreement (NDA).
What it covers:
Confidential business info
Client data
Product specs
Trade secrets
Who should sign it:
Employees
Contractors
Investors (before deep due diligence)
Anyone you share sensitive info with
Drawback: NDAs aren’t bulletproof. But they’re a deterrent. And they give you legal standing if someone leaks your stuff.
6. Non-Compete Agreements: Guard Your Turf
Let’s say your ex-employee starts a rival business using your playbook. Or your supplier launches a competing product. Ouch.
Non-compete clauses can help.
What they do:
Prevent people from starting similar businesses in your niche or region
Limit use of your proprietary knowledge
But beware:
They must be reasonable in scope and duration
Courts won’t enforce overly broad restrictions
Example clause: “Employee shall not engage in any competing business within 50km of Sydney for 12 months post-employment.”
Chart: Enforceability of Non-Compete Clauses by State
State/Territory
Enforceability Level
Notes
NSW
Moderate
Must be reasonable
VIC
High
Courts often uphold clauses
QLD
Low
Harder to enforce
WA
Moderate
Depends on industry context
7. Bonus Round: The Contracts You Forgot You Needed
These didn’t make the original list, but they’re just as important:
Privacy Policy & Terms of Service: Required if you collect user data or run a website.
IP Assignment Agreement: Ensures your business owns the work created by employees or contractors.
Shareholder Agreement: Crucial if you’re raising capital or issuing equity.
Service Level Agreement (SLA): Sets expectations for performance and uptime (especially for SaaS).
Feature Comparison: Which Contracts Do What?
Contract Type
Protects You From
Covers What
Must-Have For
Employee Contract
Misunderstandings
Job roles, pay, leave
All businesses
NDA
Info leaks
Confidential data
Tech, media
Non-Compete
Copycats
Competitive behavior
Product-based
Supplier Agreement
Delays, disputes
Delivery, pricing
Retail, eComm
Partnership Agreement
Founder drama
Roles, equity, exits
Co-founders
IP Assignment
Ownership issues
Code, designs, inventions
Tech startups
Privacy Policy
Legal fines
Data collection practices
Online biz
Common Pitfalls (And How to Dodge Them)
Using templates blindly: They’re generic. Your business isn’t.
Skipping legal review: That $500 lawyer fee could save you $50k later.
Not updating contracts: Your business evolves. So should your docs.
Assuming verbal agreements are enough: They’re not. Ever.
FAQs: Legal Contracts for Aussie Startups
Q: Can I use free templates online? A: Sure, but tweak them. Better yet, get a lawyer to review. Templates don’t know your business.
Q: Do I need contracts if I’m a sole trader? A: Yes. You still need NDAs, supplier agreements, and employment contracts if you hire.
Q: What happens if I don’t have these contracts? A: You risk lawsuits, fines, and messy breakups. It’s like driving without insurance.
Q: Are NDAs enforceable in Australia? A: Mostly, yes. But they must be clear, reasonable, and not overly broad.
Q: How often should I review my contracts? A: At least annually. Or whenever your business model changes.
Final Thoughts: Don’t Skip the Boring Stuff
Look, I get it. You didn’t start a business to drown in paperwork. You want to build cool stuff, make money, change the world. But contracts are your safety net. They let you take risks without falling flat.
So take a weekend. Grab coffee. Sit down with a lawyer. Get your legal house in order. Your future self will thank you.
And if you ever need help writing policies, building workflows, or just ranting about startup chaos—I’m your guy.
