Essays on Business Structures That Are Available to Henry and Henriette Assignment

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The paper 'Business Structures That Are Available to Henry and Henriette " is a good example of a business assignment. The various business structures that are available to Henry and Henriette with respect to the type of business they would like to establish include; They can establish a partnership. - Under the Australian Partnership act of 1963, the two may establish a partnership which is a business involving a number of people (between 2 and 20) carrying on a business together (austlii. edu. au, 2017). In this regard, they may form a general partnership in which the two partners will be equally responsible for its management and with unlimited liability for its debts and obligations (business. vic. au, 2017).

On the other hand, the could choose to establish a limited partnership in which one of the partners will have limited liability (Partnership Act (1958). A partnership so established has a number of features including; A partnership is relatively easy to establish compared to a company owing to few legal requirements It will have a separate tax file number (TFN) It is not compulsory to have an Australian Business Number (ABN) though one may apply (austlii. edu. au, 2017). There will be shared control and management between the partners However, though the partnership does not pay income tax on the income earned, each of the partners will have to pay tax on the shared net income from the partnership In addition, a partnership tax return will have to be lodged with the Australian Tax office annually Each partner will also be responsible for their own superannuation arrangements The partnership will also have to register for GST if its annual income turnover is $75,000 or above (business. gov. au, 2017) They can establish a corporation- under the corporation’ s act 2001, the two can establish a company which will be either a private limited company or a public limited company (austlii. edu. au, 2017).

This is an entity that has a separate legal entity from its founders or those who manage it. In this regard, the corporation will be able to own property, it can sue or be sued and it can be taxed and also be held legally liable for its actions. The key benefit that the two will derive from establishing a corporation is the avoidance of personal liability.

However, it requires a lot of costs to establish while a lot of record-keeping and regulation is required (asic. gov. au, 2017). Despite this, they might be interested in establishing a company owing to its numerous advantages including the limited liability, ability to transfer ownership, separate legal entity, ability to raise capital through the issuance of shares if need be and possible tax advantage since corporation tax might be lower. Assuming that a company structure is the most appropriate business entity to operate the Health Care Center, The type of company the two should formulate should be a proprietary company.

Based on corporations act 2001 sec 14, a proprietary company is a type of company having at least one shareholder (owner) but with no more than 50 non-employee shareholders on the basis of sec 113. In addition, the company must have at least one director (austlii. edu. au, 2017). The company is not required to have its registered office open to the public and does not need to appoint an auditor. This type of a company is ideal for Henry and Henriette owing to the fact that it allows for at least one director as opposed to a public company that has to have at least three directors based on corporations act 2001 sec 201A (2).

In addition, a proprietary company would be ideal to them for a number of reasons; The company is very simple to form and only needs at least one director as opposed to a public company that needs at least three directors. Thus, unless they coopt in a third partner, it will be impossible for them to form a public company thus leaving them with a proprietary company as their choice. A proprietary company can start operations immediately after being incorporated without requiring a trading certificate. The company does not have to invite the public to buy shares and this being a business between friends, a proprietary company would be ideal for them (schweizer. com. au, 2017). A proprietary company, as opposed to a public company, does not have many regulatory requirements such as holding statutory meetings or publishing its accounts. A proprietary company may also grant loans to the directors without the government’ s approval while unlike a public company, a proprietary company may pay remuneration to its directors and also appoint them to an office of profit.

References

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austlii.edu.au, 2017, Australian Partnership act of 1963, Retrieved on 5th April 2017, from;

http://www.austlii.edu.au/au/legis/act/consol_act/pa1963154/

business.vic.au, 2017, Partnership: Register the most suitable structure for your business, Retrieved on 5th April 2017, from;

http://www.business.vic.gov.au/setting-up-a-business/business-structure/partnership

austlii.edu.au, 2017, Partnership Act (1958), Retrieved on 5th April 2017, from;

http://www.austlii.edu.au/au/legis/vic/consol_act/p84a1958135/

business.gov.au, 2017, Partnership, Retrieved on 5th April 2017, from;

https://www.business.gov.au/Info/Plan-and-Start/Start-your-business/Business-structure/Business-structures-and-types/Partnership

austlii.edu.au, 2017, Corporation’s act 2001, Retrieved on 5th April 2017, from;

http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/

asic.gov.au, 2017, Your Company and the law, Retrieved on 5th April 2017, from;

http://asic.gov.au/for-business/running-a-company/company-officeholder-duties/your-company-and-the-law/

schweizer.com.au, 2017, Business structures in Australia, Retrieved on 5th April 2017, from;

http://www.schweizer.com.au/articles/Business_Structures_in_Australia_(SK00125445).pdf

austlii.edu.au, 2017, Corporations act 2001-Sect 1.5.5, Retrieved on 5th April 2017, from;

http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s1.5.5.html

austlii.edu.au, 2017, Corporations act 2001-Sect 601 FC, Retrieved on 5th April 2017, from;

http://www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s601fc.html

Lester, T&, Lovells, H2017, Corporate governance and directors’ duties in Australia: Overview, Retrieved on 5th April 2017, from;

https://uk.practicallaw.thomsonreuters.com/1-502-9743?__lrTS=20170405120948604&transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1

lawteacher.net, 2017, Duties and responsibilities of directors, Retrieved on 5th April 2017, from;

https://www.lawteacher.net/free-law-essays/company-law/duties-and-responsibilities-of-directors.php

asic.gov.au, 2017, Directors liabilities when things go wrong, Retrieved on 5th April 2017, from;

http://asic.gov.au/for-business/your-business/tools-and-resources-for-business-names-and-companies/asic-guide-for-small-business-directors/directors-liabilities-when-things-go-wrong/

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