When you start a business, you need to be registered with various government authorities.
Strictly speaking, in Australia photographers don't need any registrations at all if they're using their own name to trade and they don't mind giving half of their income to the tax office. So while registrations might not be ‘legally' required, in practical terms they are essential.
In Australia, if you trade under a name that is different to your own name and a description of what you do, you need to register your ‘trading' or ‘business' name.
For instance, strictly speaking ‘John Smith, Photographer' does not require to have his name registered as it does no more than describe who he is and what he does. However, ‘John Smith Photography' is completely different (according to the law) and would require registration.
For practical purposes, registering your business name will be mandatory.
There are two ways of registering a business name, depending on your business structure.
If you intend to trade as a sole trader or a partnership (or possibly for a trust), you need to register your business name in your state. Registration generally lasts for three years, but there are subtle differences from state to state, and from time to time.
Check out the websites listed on the next page for more information about your state.
Most photographers only have a studio in one state and, generally speaking, only require registration in one state as well.
However, if you set up business in a second state, you'll need to have your business name registered there as well. This can pose some practical and financial obstacles and you should consult your lawyer at this stage.
Companies don't need a business name. The company's name is considered the business name and company names are registered Australia wide.
However, setting up a company is more than just registering a business name. The company name comes with a whole bunch of legal obligations and financial requirements. Don't set up a company just to get a business name!
If you have a company, you don't need a separate business name. However, it is quite common for a company to have one or more trading names, and each of these trading names would need a business name registration in its state.
One of the misconceptions about business and company name registrations is that they protect the name from being used by other people.
While this is partly true in that the government departments won't register two names that are the same or very similar, the protection you're getting is only to avoid confusion.
Registration is compulsory so the government has someone to chase if you do the wrong thing by the public - they don't want to chase the wrong person.
If Photographer B sets up a business with a name that is the same or very similar to Photographer A, Photographer A can take legal action against Photographer B for ‘passing off' or pretending to be someone else.
The tort of passing off is a common law action and you can also use the trade practices legislation to take action for misleading or deceptive conduct. Having your business name registered helps prove your case, but may not be essential to the case.
If you wish to actively protect your business name, you may need to look at trademarks. As a start, visit [www.ipaustralia.gov.au] or talk to an IP (intellectual property) lawyer.
Tax file numbers are mandatory for all people in business, but there are special rules depending on what type of business structure you use.
A sole trader doesn't need a second tax file number for the business - his or her tax file number is all that's required.
A partnership will need its own tax file number, but it won't actually pay any income tax (but it does pay GST). The partners declare the income on their personal tax returns with their personal tax file numbers.
Companies and trusts need separate tax file numbers and pay separate taxes.
You can apply for a tax file number for a partnership, company or trust at the same time you apply for an ABN (Australian Business Number).
Personal tax file numbers require a special application form - visit [www.ato.gov.au] for more details.
The government would like all businesses to have an Australian Business Number (ABN), but it's not compulsory.
However, any business paying another business must withhold 48.5% tax unless that other business quotes a valid ABN. So, if you do a $1000 job for an advertising agency but can't quote an ABN, the agency will pay you $515 and send $485 direct to the tax office. Note, this has nothing to do with GST (which we will cover next).
Of course, if all your clients are consumers and not businesses, you could conceivably trade without an ABN because consumers don't have to withhold tax. In practical terms however, you need an ABN and it must appear on all your invoices.
You can apply for an ABN at [www.business.gov.au].
If your business has total sales in excess of $75,000 per annum, it must be registered for GST (and to be registered for GST, you must have an ABN). Most photographers will register for a tax file number, an ABN and GST at the same time.
If you're just starting out in business, some people suggest not registering for GST and keeping your paperwork simple. On the other hand, if you're serious about going into business, you're going to need GST registration eventually so you might as well get registered up front.
It's recommended you talk to your accountant before registering for GST as there are a couple of trick questions in the process. Most small businesses should elect to pay GST on the cash (non-accrual) basis and pay quarterly - if you fill in the application form wrongly you can end up paying GST monthly on an accrual basis (which can mean you're paying GST before your client has paid you!)
You also need to consider registering as an employer.
The final registration is practically essential - an internet domain or website name. There are very few photographers who don't have and use a website in business.
For more information, go to [www.auda.org.au/domains/au-domains/].
The information in this article is general in nature and should not replace personal advice given by your own legal and financial advisers.