I want to start up a new IT software/hardware or web design business. What do I need to do?

You need to speak with an experienced IT lawyer and accountant to find the right solution and business structure to ensure that you set everything up from the outset, to maximize profits and protect your business.

At Newhouse & Arnold Solicitors we try to put in place the necessary safeguards from an early stage to best protect your new business. We will provide you with advice around different business structures such as sole trader, partnerships, companies and trusts, to ensure that you are set up to raise capital at a later stage. We also advise how to best protect your personal assets and property from your businesses risks and liabilities. In addition, our IT lawyers will advise you on registration of business names, whether there is a need to register trademarks for any products and other safeguards to protect your business from competitors.

The 5 key steps we will advise and assist you with in setting up a new IT business include:

1. Establishing your new business structure;
2. Registering your business name with the Department of Fair Trading;
3. Obtaining an Australian Business Number (ABN) from the Australian Taxation Office and possibly register for GST reporting;
4. Implementing a partnership agreement or a shareholders agreement on how to best operate the business.
5. Advise on any trademark or patent applications to safeguard you.

We often see start up and new IT businesses set up without any business structure that often leads to internal and external problems, which could have been avoided by obtaining the right advice early on. It is more expensive to alter business structures and resolve disagreements later on.

At Newhouse & Arnold Solicitors we are the IT lawyers that can provide you with tailored advice and put in place what is required for you to establish or start up your business.

What should I have in place before I start trading with customers or clients?

As experienced IT lawyers, we would recommend that you put in place:

We can set up a precedent or review your proposals or scope of works. As experienced IT lawyers, we will review the representations and statements made by you to reduce the risks of future disputes between you and your client. We would not recommend that you enter into a business proposal which may promote your own product or service that could cause your customers not to be able to use other third party software.

In addition to your proposal or scope of work, you will need an IT agreement or IT contract for you to sign off with your client for the performance of work. The contract should cover some of the more basic terms such as how and when you get paid and many other terms about how you will perform the work, what happens if you can’t perform the work and what both parties need to do to achieve the end product. As experienced IT lawyers, we will reduce your exposure if you are negligent or in breach of the scope of work, together with terms dealing with how to best resolve a dispute. We may suggest multiple agreements to be implemented to cover all types of work. For example, if your business was providing services such as web design or software development, then you would require an agreement for that work and then a further agreement for ongoing support and maintenance (“Maintenance Agreement”). There are many agreements that can be prepared in plain English specifically for your business needs and products.

At Newhouse & Arnold Solicitors we provide experienced advice on your IP and suggest alternative and practical ways to protect it. We recommend that you protect your IP through the IT contract or IT agreement that your customer will enter into with you. In addition we may suggest that you register a trade mark or patent, or advise if you are protected at common law from breaches of copyright and the IP in which your business owns. In addition, we try to provide you with an understanding of the IP you own, as opposed to any open source code which you may have used or adopted. As experienced IT and IP lawyers we can put in place protection measures for your businsess’s most valuable asset, your IP.

You will need to be commercial in your response however, some terms should not be negotiable. You need to speak to our experienced IT lawyers, to discuss which terms should not be varied. Protecting your IP, jurisdiction, limiting exposure are some of the terms which should not be varied, while other terms such as price, frequency of billing and time frames can be negotiated, depending on the circumstances. As experienced IT lawyers we will provide you with ongoing advice as what changes are reasonable and the risks associated with such changes.

You need to consult with our experienced IT lawyers as to what rights you may have under your contract to resolve the dispute and what steps need to be taken.

Initially we will need to review the contract to determine the dispute resolution process in the contract. Usually, there are time frames involved and you need quick advice to protect you.
Your agreement may also stipulate mediation or arbitration which can be more cost effective and cheaper than Court proceedings. We will work with you to resolve any dispute as quickly as possible and maintain a commercial relationship with your client for the development of future business.

As experienced IT and IP lawyers we examine the products in which the two competing domain names own and the territories in which they market their products in and can advise you of your rights. If through negotiation an agreement cannot be reached then, in many cases, a specialist arbitrator canbe appointed to determine which party infringes the law on the issue. You should not ignore any notice that your website or domain name infringes any laws, whether its for passing off of a another domain name or a breach of copyright or breach of IP. You must act quickly and get expert IT advice on this type of problem or you may run the risk of the other party getting an injunction against your business, restraining you from conducting business until a Court determines the dispute. At this stage, it will be a very costly exercise to defend your rights in Court and/or continue running your business.

You should have clear E-commerce terms and conditions for the sale of products on your website. You should not copy standard terms and conditions from another website as these terms and conditions may not adequately protect your business and also exposes your business to a breach of copyright.

You should obtain expert advice from our IT lawyers to have appropriate terms drafted that are particular to what you are selling, where you are selling it from and who your target market is. As experienced IT Lawyers we understand the nature of your industry and can draft terms which allow you to efficiently do business over the internet without offending local laws or international laws. This may include addressing who pays taxes, duties or national or international compliance requirements for shipping your product.

You should be careful what you say on your website because customers will rely on the truth of the statement. If the statement is not true or somewhat exaggerated then the customer might seek a refund in addition to any losses they have suffered as a result of your statement. The Australian Competition and Consumer Commission (ACCC) may also take action against your business. There are “Advertising and Selling” guidelines prepared by the ACCC to assist businesses in the way they promote products. The Australian Competition and Consumer Law sets the ground rules for ethical trading and we, as experienced IT lawyers, can guide you through these requirements and also draft appropriate disclaimers for your website.

Our experienced IT lawyers can urgently apply to a Court to restrain a former employee or contractor from disclosing valuable IP to a third party, obtained whilst employed by you, or in some circumstances prevent them from setting up a competing business. The Court acknowledges the value in IP owned by a business and can assist in protecting it. The application must be made urgently and the Court has the power to restrain and pay compensation to your business. To protect your business, our experienced IT lawyers can provide you with appropriate employee and/or contractor agreements to restrain the leaking of or using your IP, often in the form of Restraint of Trade clauses.

You are often required to submit a proposal and reply that addresses all aspects of the tender.

Our experienced IT lawyers can provide an analysis of the proposed tender and assist you in addressing the key requirements. You may need to consider:
1. how you answer the tender specifically to your product or IT services. Normally you would need to disclose the commercial terms such as price, how long the implementation will take and who will perform the work.There are other ancillary issues that we can guide you in to address key criteria in your proposal.

2. reviewing the contract and requesting changes to those terms prior to submitting your tender proposal. In most cases, a tender will not allow the winner of the tender process to request changes to the contract after they have been announced. In these circumstances, you should request changes to the contract prior to submitting the tender proposal.

We also have experience with government tenders and reviewing Government IT Contracts (GITC).