Business Contract, Contract Law and Business Contractors

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If you have a specific expertise, independent contracting can be an ideal way of capitalizing on your knowledge. You've decided to go into a new contract business as an independent contractor, completed your business market research and written your business plan. Now you're ready to take the next step, but where do you begin with your business contract?

Independent contractors run their own business, hiring out their services to other businesses and organizations. Unlike most employees, independent contractors negotiate their own fees and working arrangements and conditions. An Independent contractor can work for a variety of clients at one time.

What is Contract? Contract Law for independent contractors may differ from country to country. In Australia, on 1 March 2007, the new independent contractors law was introduced, possibly affecting your tax, occupational health and safety and other obligations. As an independent contractor, you should consider the following issues.

As an Independent contractor, when you are ready with your business, you may already have or will need a good Business Accounting Software, you can get that here on our website, consider our ShopMate Business Accounting Software, it just may do the job for your Contract business.
You may also brush up and read on Accountancy Theories...

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When prospective customers had a business or had it on their mind, traditionally, Softhard Solutions was able to provide them with accounting software (often also hardware) to run their business the way they do the business.

There were, at many times, Softhard Solutions' customers who did not quite have a clear picture of the business they wanted to do or undertake.

This page and following pages are dedicated to such people. Its all tips and ' need to know ' about a business and what to do before a beginning.

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How do I determine my status?

It is possible to be an employee for some work and a contractor for other work. The fact that you have an Australian Business Number (ABN) does not automatically make you a contractor. If you operate via a labour hire firm, you may not need to manage your own tax or occupational health and safety requirements and other obligations.

What to do...

  • Visit the Contracting essentials page on the Tax Office website or phone 13 28 46.

  • See the Independent contractors page on the Workplace portal or phone the Independent contractors hot-line on 1300 667 850.

  • Consult an experienced Business Contract adviser, accountant or solicitor.

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What are my taxation obligations?

Your taxation obligations
As a Business Contractor, you may have to pay tax at a different rate to employees. You may also have to arrange to pay your own tax.

Personal Services Income (PSI)
PSI is income that is mainly a reward for personal efforts or skills, and can affect your tax obligations as a contractor. To find out how PSI will affect your tax return, use the following Tax Office resources.

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What are my employment entitlements?

Some Business Contractors are entitled to receive superannuation. If you are not covered, you may choose to arrange your own super contributions.

Unlike employees, Business Contractors are not entitled to a minimum rate of pay or conditions such as annual leave, sick leave and redundancy entitlements. Your fees are a matter for negotiation between yourself and those you are contracting with.

Occupational Health & Safety laws
As a contractor, you are entitled to a safe and healthy workplace and are required to comply with the duties set out in the Occupational Health & Safety Act.

Workers compensation insurance
As an Independent Contractor, you may not be entitled to compensation unless you have arranged your own accident protection insurance.

What to do...

  • Visit the Contracting essentials page on the Tax Office website or phone 13 28 46.

  • See the Independent contractors page on the Workplace portal or phone the Independent contractors hot-line on 1300 667 850.

  • Consult an experienced contract business adviser, accountant or solicitor.

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How is my intellectual property affected?

Intellectual property (IP) is the general name given to the laws covering patents, trade marks, copyright, designs, circuit layouts, and plant breeder's rights.

Intellectual property laws protect the property rights in creative and inventive endeavors and give creators and inventors certain exclusive economic rights, generally for a limited time, to deal with their creative works or inventions.

Although you may have contributed to or created material, products and ideas as a contractor, you may not be entitled to intellectual property ownership such as copyright. This may depend on the work contract business you sign.

Here are a few tips and ideas to consider, read more on Intellectual property of a business.

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Business Tips

Some tips on how to avoid business failure:

  • Don't underestimate the capital you need to start up the business.

  • Understand and keep control of your finances - income earned is not the same as cash in hand.

  • More volume does not automatically mean more profit - you need to get your pricing right.

  • Make sure you have good software for your business , software that provides you with a good reporting picture of all aspects of your business operations.

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