More than three lakh new businesses enter the Australian market each year. The vast majority of these businesses comprise small and medium enterprises with a turnover of approximately $2 million. Certain pre-requisites are paramount for each of these businesses to scale and survive in the industry. Business registration is one among them. To register a business in Australia is a straightforward process, and the perks are tremendous. But, on the contrary, not getting your business registered can have other unpleasant consequences. Some of them are listed below:
Lawsuits: If your firm lacks the necessary business registration, it is subject to legal action. This can happen in several different ways. For example, a disgruntled client who is displeased with the products or services you offer can file a small claims lawsuit against you and accuse you of engaging in fraudulent behaviour because you lack a legit business licence. Alternately, regardless of the other merits of the case, if you are sued and don’t have the appropriate permissions in place, the court may default to a judgement against your business. You can be responsible for high-priced damages, legal costs, and additional fines or penalties in either case.
Loss of Credibility: The loss of your company’s reputation is one of the most severe effects of not having a business registration and the most difficult to quantify. Because your reputation is vital, if you are ever penalised or sued for operating without a business licence and news gets out, the ensuing bad press may be more expensive than any fine or lawsuit. When a consumer learns that your company isn’t functioning rightfully, they can start to doubt your services’ reliability and your company integrity. That can be heartbreaking and challenging to repair, considering Australia’s highly competitive and cut-throat market and media.
Unable To Compete For Opportunities: The inability to submit a bid for a particular project or opportunity may be another repercussion of operating without a business registration. You may need to provide documentation of your licence to win a bid. This is especially prevalent in the contracting and building sectors, where licences are necessary to demonstrate compliance with safety and insurance norms. These opportunities may pass you by if you lack the required registrations, which will limit your potential to expand your business.
Fines & Penalties: You should anticipate at the very least having to pay a fee or penalty if you run your business without proper registration. This is the most typical situation when a company violates the terms of a business licence. The severity of the non-compliance and the jurisdiction you are in, like with most things related to company registration, will determine the precise amount of the punishment or penalty. For instance, a business that knowingly runs without a valid business licence for years will often face a minor penalty than one that missed a renewal date and was out of compliance for a few months.
Delays In The Release Of New Goods Or Services: When you fail to register a business in Australia, you may experience delays in introducing new goods or services. Some governments need a licence from manufacturing companies before they may distribute certain goods, such as toys or other consumer goods. If you don’t have the required registrations, you won’t be allowed to put that product to market until you do.
You can avoid all the hassles mentioned above by opting for business registration.