Choose your business type and location

Understand the different business types

Once you've analysed and researched your business idea and created a plan, you're ready to choose a business type. Depending on the type, your business will be regulated at an Australian-wide level or an ACT level.

Australian-wide regulated business types

• A sole trader is the simplest structure available. It gives you full control.
• A company is more complex. It limits your personal liability because it’s a separate legal entity.
• A partnership is made up of 2 or more people who distribute income or losses.
• A trust has a trustee that is responsible for business operations.
• A mutual is a member-owned organisation where members are the customers.

Learn about the different business structures from business.gov.au.

ACT regulated business types

Not-for-profits, co-operatives and associations must be registered in the ACT. There are obligations for each you must be aware of before deciding on these business types. Access Canberra can help you understand if they're right for your business.

Not-for-profit

A not-for-profit can register as a company or an incorporated association. Non-profit organisations will need to apply for a charitable collections licence.

While similar to not-for-profits, social enterprises do not have a legal structure in the ACT. The difference is due to social enterprises engaging in some kind of commercial trade. If you are considering this type of business, speak to a lawyer to discuss your options or you may learn more by contacting The Millhouse Ventures.

Co-operatives

A co-operative is a member-owned structure that serves its members. Co-operatives are values driven, community-based, democratic organisations. They're owned and controlled by their workers, members and people who use their service. They’re not owned by shareholders. Profits generated are reinvested in the enterprise or returned to the members. You must register a co-operative with Access Canberra

Associations

An association is simpler and more affordable than a company with a legal entity separate from its members. There are specific rules in ACT for running an association. Make sure you meet you can meet the obligations and reporting requirements to the ACT Government before you apply.

Choose a location for your business

Property leases and location

Whatever your business, there are things you need to consider when looking for the right location. What your business does will determine the workspace you need. You should consider the financial cost, including any tax implications. For some businesses a co-working space might be a good option.

Whether you buy or lease commercial property for your new business, you'll need to learn if you can run it there. To do this you'll need to check the property's Crown lease. The lease will list how you can use the site. For example, the lease may allow an office or shop but not allow a restaurant or the sale of alcohol.

You can get a copy of the lease from your real estate agent or the Land Titles Office.

It's essential to understand the Crown lease before you sign anything. It is not always possible to makes changes to it, even if you need them to operate your business. Whether you can make a change will depend on the land use zone and if the new use is suitable for the location.

If you need to understand a Crown lease and what changes are allowed, you should contact your planning professional, a conveyancer or Access Canberra.

Learn more about Crown leases.

Connecting to the gas network

When choosing a location in the ACT, be aware that new gas network connections are not allowed.

If the property has an existing gas connection (shown by a gas meter being present) also be aware of restrictions. If the gas connection is removed (abolished) during renovation or construction, you may not be allowed to reconnect. Builders sometimes need to remove the gas connection to ensure a safe worksite.

If the premises does not already have a gas connection, you will not be able to get one. Consider this when choosing a location and think about using electric appliances instead.

Visit our Sustainable Business Program page for:

• free advice on how to go electric
• rebates on electric appliance upgrades.

To help you plan your transition, you can also use the Your Energy Journey tool.

Development approval for home-based businesses

To operate a business legally from your home, you may need development approval. For example, if you’re a hairdresser and have more than 5 cars visiting you on average each day, over the course of 7 days, you’ll need approval.

Small scale home businesses can be exempt from needing development approval if:

• no more than 2 people work on the premises at any time
• anyone who works on the premises genuinely lives there
• the area used for the business including storage is not more than 40m²
• any vehicles parked at the premises for the purposes of the business are parked in a driveway, garage, carport or location screened from the road
• averaged over a period of 7 days, the conduct of the business does not generate more than 5 vehicle arrivals each day.

If you don’t meet exemption criteria, talk to the Territory Planning Authority They may give approval and will look at:

• the number of customers
• vehicles visiting your property
• accessibility
• the negative impacts on neighbours
• appropriate use on the block and more.

If you need to alter your property to create a home-based business you may need a development approval or a building approval only. A building approval is done by a private certifier.

You should check the noise level and air emissions requirements for your land use zone. For example, motor mechanics, carpenters, spray-painting booths and coffee roasteries are not suitable for residential areas. They usually result in noise and odour complaints.

Even with a home-based business, you must still comply with all workplace health and safety requirements and manage general office hazards.

Contact the Gateway Team for help with your development application.