Legal Requirements
Identify one legal requirement that may need to be completed before a business begins operating.
Registering the business name with ASIC.
Other acceptable responses include registering a domain name, obtaining licences or permits, registering for tax obligations, or obtaining WorkCover insurance.
Identify one external professional who could assist a person when establishing a business.
An accountant.
Other acceptable responses include a bookkeeper, solicitor, bank manager, insurance broker, recruitment consultant, marketing consultant or IT specialist.
Identify one financial control system that a business could establish.
A budgeting system.
Other acceptable responses include cash-flow management, accounts receivable control, inventory control or auditing.
Identify one factor a business should consider when choosing a supplier.
The price charged by the supplier.
Other acceptable responses include quality, reliability, delivery times, location, payment terms, flexibility or CSR practices.
Identify one policy that a new business may need to establish.
A workplace health and safety policy.
Other acceptable responses include an equal opportunity policy, privacy policy, customer complaints policy, social media policy or refund policy.
Describe the purpose of registering a website domain name.
Registering a domain name gives the business the right to use a particular website address for a specified period. It allows customers to locate the business online and helps establish its online identity.
Describe the role of a solicitor when a business is being established.
A solicitor provides advice about the legal requirements affecting the business. They may prepare or review contracts, advise on the ownership structure and help the business comply with relevant laws.
Describe the purpose of a business bank account.
A business bank account keeps business income and expenses separate from the owner’s personal finances. It provides a clear record of business transactions and makes financial monitoring and reporting easier.
Describe one characteristic of a supplier that meets a business’s corporate social responsibility objectives.
A socially responsible supplier may use environmentally sustainable materials and production methods. This reduces environmental harm and supports the business’s sustainability objectives.
Describe the purpose of a workplace procedure
A workplace procedure provides employees with step-by-step instructions for completing a particular task. It helps ensure the task is completed consistently, safely and correctly.
Explain why a business that employs workers in Victoria must obtain WorkCover insurance.
A Victorian business with employees must obtain WorkCover insurance to comply with workplace injury insurance requirements. This provides financial support for workers who experience a work-related injury or illness and protects the business from having to directly cover all associated costs.
Explain how an accountant can assist a new business owner.
An accountant can assist by establishing financial systems, preparing budgets and providing advice about tax obligations. This helps the owner make informed financial decisions and reduces the risk of errors or non-compliance.
Explain why accurate record-keeping is important for a new business.
Correct Response:
Accurate record-keeping allows the business to monitor its income, expenses, assets and liabilities. This supports financial decision-making and helps the business prepare financial reports and comply with taxation requirements.
Explain why supplier reliability is important to a business.
A reliable supplier delivers the required inputs at the agreed time and quality. This helps the business avoid production delays, maintain consistent output and meet customer expectations.
Explain how policies and procedures can help a business comply with legal requirements.
Policies communicate the rules and standards employees must follow, while procedures explain how to follow them. This reduces the likelihood of unlawful behaviour and helps the business demonstrate that it has taken steps to meet its legal responsibilities.
Compare registering a business name with registering a website domain name.
Both registrations help establish and identify the business to customers. However, a business name is registered with ASIC and allows the business to trade under a name other than the owner’s personal name, whereas a domain name is registered through an accredited domain registrar and gives the business the right to use a particular website address.
Compare the role of an accountant with the role of a bookkeeper when establishing a business.
Both an accountant and a bookkeeper help a business manage its financial information. However, a bookkeeper primarily records daily financial transactions and maintains accurate financial records, whereas an accountant analyses this information, prepares financial reports and provides broader financial and taxation advice.
Compare budgeting with cash-flow management as financial control systems.
Both budgeting and cash-flow management help a business monitor its financial position and make informed decisions. However, budgeting estimates expected revenue and expenses and compares them with actual results, whereas cash-flow management tracks the timing of money entering and leaving the business to ensure sufficient cash is available to pay expenses.
Compare a low-cost supplier with a supplier that meets the business’s CSR objectives.
Both suppliers provide the inputs needed for the business to operate. However, a low-cost supplier may reduce expenses and improve profitability, while a CSR-focused supplier may use ethical labour practices or environmentally sustainable materials. The CSR-focused supplier may improve the business’s reputation but may charge higher prices.
Compare a business policy with a business procedure.
Both policies and procedures guide employee behaviour and support consistent business operations. However, a policy states the business’s rules, expectations or overall approach, whereas a procedure provides the specific steps employees must follow to carry out a task or apply the policy.
Discuss the importance of complying with trade practices legislation when establishing a business.
One advantage of complying with trade practices legislation is that the business protects customers by providing accurate information, fair contracts and products that meet consumer guarantees. This can strengthen the business’s reputation and reduce the risk of customer complaints. However, compliance may require the business to spend time and money reviewing advertising, refund procedures and sales practices. Overall, compliance is important because the legal and reputational consequences of misleading or unfair conduct are likely to be greater than the cost of establishing compliant practices.
Discuss the use of external professionals when establishing a business.
One advantage of using external professionals is that they provide specialised knowledge that the owner may not possess, which can improve decisions and reduce legal or financial errors. They can also save the owner time by completing complex tasks. However, professional advice can be expensive, particularly for a new business with limited funds, and the advice may not always reflect the owner’s vision. Overall, external professionals are valuable when their expertise reduces significant risks or supports important establishment decisions.
Discuss the importance of establishing financial control systems when starting a business.
One advantage of financial control systems is that they allow the owner to monitor revenue, expenses, stock and customer payments, reducing the risk of losses or fraud. They also provide information that supports corrective decisions. However, establishing and maintaining these systems may require specialist software, staff training and additional time. Overall, financial control systems are important because they improve financial accuracy and support the business’s short-term survival and long-term performance.
Discuss choosing suppliers that meet the corporate social responsibility objectives of a business.
One advantage is that responsible suppliers can reduce environmental or social harm and strengthen the business’s reputation among customers. They may also reduce the risk of the business being associated with unethical practices. However, responsible suppliers may charge higher prices or offer fewer product options, increasing costs and limiting flexibility. Overall, a business should select CSR-focused suppliers when their practices align with the business’s objectives and the benefits justify any additional costs.
Discuss the importance of establishing policies and procedures in a new business.
One advantage of policies and procedures is that they clarify employee responsibilities and create consistent routines, which can improve efficiency and legal compliance. They can also reduce mistakes by explaining how tasks should be completed. However, developing and updating them requires time, and overly rigid procedures may limit employee flexibility. Overall, policies and procedures are important because they provide clear expectations while allowing the business to operate consistently and lawfully.