Small business legal and risk management

BSBSMB401 Establish legal and risk management requirements of small business

This unit is about identifying and complying with all regulations affecting the business. It requires analytical skills to interpret legislation and regulations and develop procedures to manage compliance.

How you will be assessed

You will be assessed through:

Specific documents Submit at least two documents: a fully researched risk register according to the requirements below. (It may be a section in a business plan.) Also submit a legislation register. It could be a summary of laws affecting you or a portfolio of plain English explanations issued by government departments.

 

Practical

You will be assessed in the workplace as a safe environment. You will need to demonstrate consistent performance of typical activities as a small business manager and wil need access to:

  1. office equipment and resources.
  2. business technology including internet access.
  3. specialist software for analyzing data.
  4. relevant legislation, regulations, standards and codes.
  5. relevant workplace documentation and resources.
  6. case studies, or where possible, real situations.
  7. interaction with others.

You will need to show that you can:

  1. Systematically identify, manage and meet legal and regulatory requirements, specifically in regard to WHS, business registration and environmental requirements.
  2. Ensure compliance, by:
    1. following taxation and industrial relations principles.
    2. updating and maintaining legal documents.
    3. investigating areas of non-compliance.
    4. monitoring provision of products and services.
    5. taking corrective action where necessary.
  3. Negotiate and arrange contracts, including:
    1. Asking for legal advice.
    2. Investigating procurement rights.
    3. Identifying options of leasing or ownership of business premises.
  4. Identify, assess and treat risks specific to the business including.
    1. prioritizing risks with highest probability of occurrence and greatest negative impact on the business.
    2. identifying insurance requirements.

 

Assignment/interview questions

  1. Outline business registration and licensing requirements aplicable to your organization.
  2. Identify all government legislative requirements relating to the specific business operation.
  3. How can one create a legal contract?
  4. How can a contract be terminated?
  5. Summarize relevant cultural differences and legal implications.
  6. Describe legal rights and obligations of these ownership structures: public company, private company, sole trader, incorporated asociation.
  7. What are the minimum records you need to keep to meet legal and taxation requirements?
  8. Consumer legislation:
    1. In summary, what are the consumer’s rights and responsibliites?
    2. In summary, what are the sellers’ rights and responsiblities?
  9. What codes of practice affect your industry? Explain briefly what they say.
  10. What are the key steps in managing risk?
  11. What insurance do you need for your business? What does it cover you for? Explain relevant insurance requirements and products.

Note: Your assessor may also ask you a variety of what if questions.

 

Detailed requirements

1. Identify and implement business legal requirements.

  1. Identify and research possible options for the business legal structure using appropriate sources.
  2. Determine legislation and regulatory requirements affecting operations of the business under its chosen structure.
  3. Develop and implement procedures to ensure full compliance with relevant legislation and regulatory requirements.

2. Comply with legislation, codes and regulatory requirements.

  1. Establish systems to ensure you identify the legal rights and responsibilities of the business and that the business is adequately protected. In particualr, these include work health and safety (WHS), business registration, and environmental requirements.
  2. Identify taxation principles and requirements relevant to the business, and follow procedures to ensure compliance.
  3. Identify and carefully maintain legal documents and maintain and update relevant records to ensure their ongoing security and accessibility.
  4. Monitor provision of products and services of the business to protect legal rights and to comply with legal responsibilities.
  5. Do investigations to identify any non-compliance with legal and regulatory requirements, and correct it where necessary.

3. Negotiate and arrange contracts.

  1. Ask for legal advice on contractual rights and obligations, if required, to clarify business liabilities.
  2. Investigate and assess potential products and services to determine procurement rights and ensure that business interests are protected (where applicable).
  3. Negotiate and secure contractual procurement rights for goods and services including contracts with relevant people, as required, according to the business plan.
  4. Identify options for leasing or ownership of business premises and complete contractual arrangements according to the business plan.

4. Identify and treat business risks.

  1. Identify potential internal and external risks to the business.
  2. Assess the probability and impact of identified risks.
  3. Prioritize risks for treatment.
  4. Develop actions to mitigate risks including identifying insurance requirements and adequate cover.