Small Business

License article

Top Ten Questions

These are the top ten questions for running your business

1. What's an example of negligence in the operation of a business?
Let's say you own a lawn-mowing business and you fail to maintain your lawnmower. If, as a result of this, the blade flies off the lawnmower and injures a person, you may well have been negligent.

2. Do I have to disclose a material fact on the insurance proposal even if it is not specifically asked?
Yes. You have to reveal anything that would affect the company's decision to offer the insurance contract. Often a proposal will contain a question like: "Are there any further facts that should be disclosed?"

3. If I am the only employee of my company, and the company owns the car I drive, does the company have to pay fringe benefits tax?
FBT is levied against companies in relation to benefits received by employees above wages/salaries and superannuation. The law changes regularly. To check whether a particular benefit is covered, talk to your accountant or contact the Australian Taxation Office.

4. What can I do if my employee won't give me his tax file number? How can I deduct his tax?
You must get advice from the Tax Office , but in general you will be obliged to calculate tax at the top marginal tax rate.

5. Do I have to accept an offer to pay a debt from a customer in instalments?
No, but it might be a good idea if you don't want to go to court and the debtor is making a genuine effort to pay the debt.

6. Is superannuation tax deductible?
Generally, superannuation contributions are tax deductible in the financial year in which you pay them, up to certain limits.   


7. Can I sue a supplier for unconscionable conduct?
You may be able to if you can prove unconscionable conduct.  The Trade Practices Act was changed recently to give small business the same sort of protection offered to consumers.  

8. I have been asked to be a company director. I guess there are no problems in doing this since I don�t actually run the company?
There are plenty of reasons to consider your liability! There is an  increasing trend towards holding directors personally liable for actions where the director has no direct control over the company. See a lawyer.  And think about insurance e.g. indemnity insurance � get professional advice.

9. If I declare bankrupt, can my wife's' assets be sold?
Your wife's assets belong to her and cannot be touched, however you need to be careful about gifts to your wife. If the gift has been made within a period designated by law, then the gift can be revoked and used to pay creditors. See a lawyer.

10. What are the main disadvantage of bankruptcy?
Firstly, most of your assets will be sold. Secondly, it may affect your ability to get credit after you are discharged. Thirdly, you may find that employers view bankruptcy as a negative character trait - bankruptcy is not covered by discrimination laws.

Read this: This fact sheet is intended to be general information about the law in Australia. It is not a substitute for legal or other professional advice. Lawscape Communications Pty Ltd, Fairfax Media Pty Ltd does not accept responsibility for loss to any person, who either acts or does not act because of this fact sheet.

Last Updated � April 2007