Planning to start your own business can be an extremely exciting time in your professional career.  Most new business owners, however, will need to remain employed until their business gets off the ground and they can afford to devote themselves financially to their business full time.

In this blog Fiona, our fixed-fee commercial law specialist, provides 4 tips to consider when starting a business whilst still employed.  These tips will hopefully help to ensure you avoid breaching any contractual obligations you may have with your current employer.

  1. Read your employment contract!

The first thing you need to do is to carefully review your employment contract.  In particular, find out if there are any restraint of trade clauses that are binding on your ability to start a business, particularly if the business you are thinking of starting is within the same or similar industry.

For example, you may be restricted in working in the same industry for a certain period of time.  Or your employment contract may restrict you from operating a similar business within a certain radius of your current place of employment.

By understanding any restraint of trade clauses in your employment contract, it will guide you as to when and how you may start your new business and will decrease the chances of your employer taking any legal action against you for breach of contract later down the track.

  1. Any Conflicts of Interest?

The second tip is to find out if there are any conflicts of interest that may occur with your current employer by starting your new business.

For example, your employment contract may limit the types of external interests you can hold in other competing businesses, such as directorships, or being a shareholder etc.  It is important to understand these conflicts of interests before you set up the company structure of your new business, as this too could result in your current employer taking legal action against you.

  1. Check for Confidentiality Clauses

Nearly all employment contracts contain confidentiality clauses.  By this we mean your contract may restrict the type of information you can share outside of the organisation.  A good rule of thumb when deciphering what is confidential information, is if the information is not public to people outside of your workplace, then chances are it is confidential and you will be prohibited from using it in your new business.

  1. Check who owns the Intellectual Property?

If you have designed or invented or created something during the course of your employment, then it is almost certain that your employer will own this intellectual property even though it may have been your ideas, designs or inventions.

Given this, you need to be aware you will most likely be prohibited using any of this IP in your new business and you should definitely seek legal advice before doing so.  To not seek proper legal advice in this regard, could mean your business being shut down before it even starts if your employer takes legal action against you for breach of contract or applies for an injunction to stop you from using the IP.

So if you are thinking of starting your own business whilst you are still working for another organisation, and you would like a legal review of your current employment contract, please contact us at and we will connect you with Fiona for a free consultation and fixed-fee quote.

When you need a lawyer, it’s important to get it right. At Legally Yours we connect you with high quality, fixed price commercial lawyers. This means you’ll know upfront exactly what you’ll be paying. No more hourly billing, no more price uncertainty.

For a complimentary consultation and fixed-fee quote connect with us at or call us on 1300 822 708.

Written by Mira Stammers and Karen Finch from Legally Yours and in consultation with Fiona McCord.