Apply Legal Requirements & Manage Small Business Finances

1. Apply Legal Requirements & Manage Small Business Finances Lesson 1 Introduction Cert IV - M. S. Martin January 2012

2. Todays Lesson • Course Overview • Relevant Licencing or Registration Legislation • Classifications for Builders, Supervisors and Managers • Introduction to Law and the Australian Legal System • Introduction to Small Business Finance and financial plans Cert IV - M. S. Martin January 2012

3. Cert IV - M. S. Martin January 2012

4. Cert IV - M. S. Martin January 2012

5. Assessment Documents and Text • Look at the “elements” (what you will be learning) • You will be assessed by simulated or project based assessments • Legal: 2 x in class / take home case study written assessments based on relevant legal documents, OHS act, Home Building Act, etc • Legal: 1 x final written exam (standard type written test) • Finance: 2 x in class / take home assignments, of compiling relevant business documents, bookeeping, cash flow etc • Finance: 1 x final written exam (standard type written test) Cert IV - M. S. Martin January 2012

6. Lesson 1 - Legal Cert IV - M. S. Martin January 2012

7. This subject and the law • This subject focuses on finding the legal requirements and understanding the requirements. • This subject will help you learn how to find relevant law and how to understand the law relevant to running a building business or working for a construction company dealing with . The areas covered include: • Australian legal system • Builders registration and licensing • Business registration • Occupational health and safety • Financial transactions • Contracts • Insurances • Industrial relations and awards • Dispute resolutions Cert IV - M. S. Martin January 2012

8. Legislative Documents • Home Building Act 1989 • This is the law that regulates residential building work in NSW. Residential building work is building or trade work on single dwellings, villas, houses and home units. • The other main document is ?: • Home Building Regulation 2004 Cert IV - M. S. Martin January 2012

9. For Licencing and Registration Legislative and Application Documents The following will help you for reference Cert IV - M. S. Martin January 2012

10. NSW Office of Fair Trading http://www.fairtrading.nsw.gov.au/default.html Cert IV - M. S. Martin January 2012

11. NSW BLIS - Business Licencing Information Service http://blis.fairtrading.nsw.gov.au/?DCSext.ref=HomePageClick:Onlineservices Cert IV - M. S. Martin January 2012

12. Building and Trade Licence Classes Cert IV - M. S. Martin January 2012

13. The Licencing Process As described by OFT Cert IV - M. S. Martin January 2012

14. Cert IV - M. S. Martin January 2012

15. Introduction to Law In your notes / text, this will be from chapter 1 (these notes were compiled by Sydney Institute, Gymea Campus) Cert IV - M. S. Martin January 2012

16. What is it ? • Law defines the “Rights” and “responsibilities” we have as individuals and companies. • If broken, we suffer consequences • Its not always simple to understand • To understand the law that applies to a given situation we have to look in a number of locations at different documents and sources of advice. • Different sources of law for the builder could include • one or a number of ‘Acts’ created by Commonwealth, State or Territory Parliaments, as well as • Any Regulations (detailed rules) made under that Act. Cert IV - M. S. Martin January 2012

17. Common Law • You might also have to consider laws called ‘common law’ which aren’t written down in an Act but have evolved through time. • Laws that may not be written in an Act include: • ‘murder’ for example, or • the right to ‘sue’ if a person has suffered a financial ‘loss’ caused by someone they should have been able to rely on. Cert IV - M. S. Martin January 2012

18. Language Literacy and Numeracy Assistance NOTE: • This subject does require the ability to research, access and interpret complex documents and it requires good written communications skills to demonstrate knowledge. If you feel you may have difficulty in these two areas particularly, • please contact ABE (Adult Basic Education unit) on campus for advice Cert IV - M. S. Martin January 2012

19. A General Note On The Use Of Websites • Finding information on the internet does sometimes involve really searching to find relevant material and coming from different angles • you might have to think of a few different words, or different topics, or try different organisation’s websites • The internet searches you need to do for this subject are of two types: general searches using search engines like Google for example; and going to specific web links we provide. • See there is more detailed information explaining this in your notes Cert IV - M. S. Martin January 2012

20. Lesson 1 - Small Business Finance Cert IV - M. S. Martin January 2012

21. What is it ? Cert IV - M. S. Martin January 2012

22. It’s the Law • The most important reason for keeping good records is that it’s a legal requirement. By law, you must keep business records: • for five years after they are prepared, obtained or the transactions completed, whichever occurs latest • They must be in English or in a form that the ATO can access and understand in order to work out the amount of tax you are liable to pay. • You will have to keep records for longer if you use information from those records in a later tax return – for example, if you claim a loss carried forward from a business activity in an earlier year. Cert IV - M. S. Martin January 2012

23. Keeping Business Records • So what type of questions can they answer for you and your business ? • These records are essential because they can answer such important questions as: • Am I making or losing money from my business? • How much am I worth? • Should I put more money in my business or sell it and go into another business? • How much is owed to me, and how much do I owe? • How can I change the way I operate to make more profit? Cert IV - M. S. Martin January 2012

24. Accounting or Bookkeeping for a Business • A Business uses Accounting or Bookkeeping to measure its financial performance • It does it by classifying (or naming) all the businesses transactions like sales, purchases, assets, and liabilities, etc. • Which has to be kept in a certain accepted format, that adheres to the ATO requirements • It also helps to: • evaluate past performance • Look at present circumstances and • Project future prospects. Cert IV - M. S. Martin January 2012

25. In General, What is Accounting ? • It could be deemed as ‘Accounting’, ‘Record Keeping’ or ‘Bookkeeping’ • Its function is to: • Firstly Record • Secondly Classify • Then Summarise • Lastly report & evaluate the financial activities of a business Cert IV - M. S. Martin January 2012

26. Simple Cash Flow (ATO example) Cert IV - M. S. Martin January 2012

27. References • Competency text for ‘Apply Legal Requirements & Manage Small Business Finances’ • Websites as listed below: http://www.fairtrading.nsw.gov.au/default.html http://www.ato.gov.au/businesses/ http://blis.fairtrading.nsw.gov.au/?DCSext.ref=HomePageClick:Onlineservices http://www.dummies.com/how-to/content/basic-bookkeeping-for-your-small-business.navId-410637.html http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P06_4001 Cert IV - M. S. Martin January 2012