Corporate Structuring and Business Law 

Table of Contents

Introduction.

Key business law, sources of regulation and acceptable business practices.

Key laws applicable to setting up a business.

Company’s structure.

Sources of regulation that govern the operation of businesses.

Application of legal principles to business.

Analysis and linking of business law and organizational structure.

Conclusion

References.

Introduction to The Croissconenut in Australia

Joseph is the sole owner of a bakery and restaurant called The Croissconenut in Australia. The business operates from his uncle’s property, leased under a verbal contract. The business has grown since its inception, and now accrues a total profit of $ 4 million a year. It also employs several employees for the smoother and better work process in the industry. He is concerned about several business transactions he has undertaken in the few years of the business, and the legal repercussions of them. This report aims to address joseph’s concerns about the application of different laws to his business and their impact as a legal advisor.

Key Business Law, Sources of Regulation and Acceptable Business Practices

Key Laws Applicable to Setting up A Business

  • The requires certain business laws that are
  • The product liability law
  • Dishonoured Cheque Act
  • Common-Law contract or labour law
  • Lease agreement
  • Privacy Act 1988

In the business setting of Joseph, these laws can be applied to assess the scenario and advise Joseph in the light of law to manage his business and avoid loss and legal action against him. These laws are the appropriate laws that can be applied to the business scenario of Joseph. As per the Product Liability Law, the company can offer him good support in managing his oven purchase. The dishonoured cheque act will provide help him to manage the dishonoured cheque with the vendors he had sold the ovens(Epstein 1988). The common contract law will guide Joseph in the employee contract. The lease agreement between Joseph and his uncle is an implied contract. The Privacy Act 1998 offered Joseph a direction to protect data.

Company’s Structure

The company at the time of start-up needs to focus on the legal structure selection. The choice of legal structure will determine the taxes, paperwork, and personal liability to face the money requirement. The individual situation of the business owner determines the organizational structure (Yusra et al. 2019). There is various kind of organizational structures such as a sole proprietorship, partnership, and corporation and limited liability. In selecting the business entity, it requires to evaluate several criteria such as legal liability, tax implication, and cost of formation, flexibility, and future needs. The current business requires having a sole proprietorship to effectively manage the work environment.

A sole proprietorship is the simplest form of business structure. It helps to work alone and make independent business decisions (Enaleev and Tsyganov 2018). It reduces the burden as the income and experience are more connected to personal income and experience. It is more of a tax-saving activity.

Sources of Regulation that Govern the Operation of Businesses

The government is a source of the regulation, and it is the government that traces the law, legislates as per the country's requirement, and implemented it within the country to create a safe business environment within the country. The product liability law of Australia arose from the statue and common law (Gray, Harymawan, and Nowland 2016). The law provides justified action to the person for loss and injury suffered due to the product's defect.

Dishonoured Cheque Actis a part of the common law of Australian, and the law indicates a legal action if the cheque of the party is dishonoured. In the corporate sector, the dishonoured cheque is a fraud and can be taken to legal procedure.

The agreement between the two parties without proper documents comes under the Retail Leases Act 1994(Duncan and Christensen 2016). There is an implied contract when any document is absent. The renting of a portion of space for business activity is done to develop and start-up business. There is a concept in the leasing that is called a binding agreement where the term of the agreement is not written. It is more like an implied contract. The case involves the common intention and common language as per the Retail Leases Act 1994 (NSW) (Duncan and Christensen, 2016). The law has been framed within the framework of the common law. 

Labour law originates as a part of the common law framework in Australia. It has emanated from the Australian parliament and legislation. The law guides the company regarding the formulation of policy and procedures regarding the recruitment, retention, and retirement of the employee. The labour law is more commonly known as the Fair Work Act. It is key to the federal employment system (Stewart et al. 2018). Employment and labour law focus on anti-discrimination and workplace surveillance. The main sources of the law are found to be the industrial instruments, legislation, and the common law. The specific area that it focuses on health and safety, work, superannuation, Long-service leave, and anti-discrimination.

The act originated in Australian legislation on the year of commencement. The Privacy Act 1988 reveals that the act prohibits data theft and also directs the company to use safety tools to protect the private data properly. Data protection is essential for the security of the company. The companies have sensitive data that is needed to protect, and the protection of data is depended on the way the company concentrates. The company needs to secure the data and use the inscription in storing the data.

Application of Legal Principles to Business

The Product Liability Law

The defect in the oven hinges make it untrustworthy and a safety concern. In this situation, the ovens do not meet the expected standards (Enable and Tsyganov, 2018). Since the industrial ovens are new and contained the defect right at the beginning, Joseph can sue the seller for the sale of defective items through the Australian Consumer Law. The verdict depends upon the extent of the damage (Offering Warranties 2020). If the ovens are still usable and can be made good with a few maintenance and repair works, then the court is likely to produce judgment in favour of the supplier. If that is not the case, then the verdict should be in favour of Joseph, and allow him to get a new set of ovens from the supplier. 

Dishonoured Cheque Act

The mark of 'not negotiable' on the cheque before transfer to the payee means that in case the payee gives it to another person or loses it, the person who gets the cheque does not have a greater right to it. So, even if Joseph lost the cheque, he could recover the amount from the person who received the payment with the help of the cheque number even if the latter was not in any way in the wrong. In the second case, the term bearer cheque makes it a lot more insecure for the payment. This notation makes the payment to the person holding the cheque, that is the bearer, rather than naming the person or business the cheque is addressed to. This turns the responsibility of the security of the cheque on Joseph, and the payer has no responsibility for it. Neither of these terms is illegal, and the cheques will be perfectly functional as long as they don't bounce (Cheques Act 1986). 

Common-Law Contract

The difference between a contractor and the employer comes under the Common Law of Employment in Australia. Joseph's cleaning crew works for him every night, regularly. They are paid weekly, and their manner of work is largely controlled by Joseph himself. The tools they use are their own. Also, he is their only client due to the regularity of their services Joseph requires. All of this information suggests that the cleaning crew is walking a tightrope between the boundaries of independent contractors and full employees. Employees are expected to do the work they do, at timings stated by the business, supervised by an administrator of the business in question, and are paid by the employer for all their tools, get paid leave and pay income tax from the employer themselves (Miles and Dowler 2014). Contractors, on the other hand, can negotiate the hours and manner of the work done, and submit invoices and ABN for their income taxes (Miles and Dowler 2014). Therefore, Joseph’s contractors do not receive the benefits of contract work while seeing all of the downsides of full employment.

Lease Agreement

The situation of the lease in the case of Joseph's business comes under the Retail Leases Act 1994. The lease will be legally treated as a normal commercial lease. This means that Joseph has to legally give a six-month notice to his landlord for the termination of the lease. This period can be negotiated by mutual agreement, but in case they do not agree, Joseph is required by law to pay the rent for the store for six months following his notice, irrespective of whether he keeps his business there or not (Leases (Commercial and Retail) Act 2001). The Retail Leases Act 1994 has several protections for small businesses such as Joseph’s bakery and aims to protect the retail business rather than the landlord, so Joseph can easily contest his landlord trying to evict him. The reverse, however, is not applicable. 

Cyber Protection Law

The bakery does not deal in the personal or private information of its clients, which nullifies the major concerns of cybersecurity. However, the bakery's information needs to be protected from cyber threats such as malware, phishing by malicious emails, and ransomware (Cybersecurity 2020 | Laws and Regulations | Australia | ICLG 2020). These types of software can cause great damage to the company by tampering, copying or even erasing its sensitive information remotely. The owner, Joseph, reports being connected to an unsecured Wi-Fi network, which does not cause harm to the business at this stage. however, his habit of not using passwords for the devices used for the business records and other activities for the business is potentially harmful, as it opens it up for malicious hackers.

Privacy Act 1988

Small businesses like bakeries and restaurants such as The Croissconenut, with an annual profit of more than $3 million, are covered by the Privacy Act 1988. They do not handle any private information about the clients and do not require their clients to reveal personal information to serve or raise profits in any way. However, if a business transaction requires a customer to reveal their personal information, the information must not be leaked in any way. The business is accountable to the government in this situation.

Analysis and Linking of Business Law and Organizational Structure

Joseph is a sole business owner in The Croissconenut. The business accrues an annual profit of $4 million and employs several people to operate his business well. Their employment must comply with workers' compensation insurance and superannuation contributions (Legal essentials for business | business.gov.au 2020). 

The structure of his business determines the licenses required, the taxes paid, personal liability and control of the business (Business structures & types | business.gov.au 2020). As a sole business owner, Joseph has full control over his business, but he is also limited by his knowledge and abilities (Business structures & types | business.gov.au 2020). Not knowing about different legal aspects of the business means that he may easily fall prey to different threats and coercions. Therefore, he is responsible for cashing and submitting his cheques and ensuring the security of his employee information. In case he suffers a loss or some other legal trouble, he is the only person who will be liable for it. 

From the above analysis, the business can easily be sued by the cleaning crew, as they have been working for a long time in a manner more similar to employees without the benefits of it. In such a case, The Croissconenut can be charged under the Common Law of Employment Contracts, and the liability would fall to Joseph. In any other organisational structure, Joseph would be more shielded from liability and loss of personal assets. 

Conclusion on Business Law Analysis Report

Joseph's business may come under threat due to the cyber privacy laws as he is very lax about the use of proper security measures for safeguarding the information in his electronic devices. Also, his concerns about the cleaning contractor work demands may prove to be true, considering their work conditions and acute supervision. They are likely to be more comfortable as employees in his business. His plans to expand may face a hurdle due to his lease contracts, as the six-month notice is legally binding for him. His concerns about the ovens may be solved by approaching the ACL council, depending on the extent of the damage.

References for Business Law Analysis Report

Australian Competition and Consumer Commission. 2020. Offering Warranties. [Online] Available at: https://www.accc.gov.au/business/treating-customers-fairly/offering-warranties [Accessed 18 June 2020].

Business.gov.au. 2020. Business Structures & Types | Business.Gov.Au. [Online] Available at: https://www.business.gov.au/Planning/Business-structures-and-types [Accessed 18 June 2020].

Business.gov.au. 2020. Legal Essentials for Business | Business.Gov.Au. [Online] Available at: https://www.business.gov.au/Planning/New-businesses/Legal-essentials-for-business [Accessed 18 June 2020].

Cheques Act 1986

Duncan, W.D., and Christensen, S.A., 2016. Assignments of non-retail commercial leases: Some contentious issues. Australian Property Law Journal, 24(3), pp.357-370.

Enable, A. and Tsyganov, V., 2018, July. Service support structure optimization of a large-scale rail company. In CEUR Workshop Proceedings (Vol. 2098, pp. 396-406).

Epstein, R.A., 1988. The unintended revolution in product liability law. Cardozo Law Review. 10, p.2193.

Gray, S., Harymawan, I., and Nowland, J., 2016. Political and government connections on corporate boards in Australia: Good for business? Australian Journal of Management, 41(1), pp.3-26.

International Comparative Legal Guides International Business Reports. 2020. Cybersecurity 2020 | Laws and Regulations | Australia | ICLG. [online] Available at: https://iclg.com/practice-areas/cybersecurity-laws-and-regulations/australia [Accessed 18 June 2020].

Leases (Commercial and Retail) Act. 2001. Federal Government of Australia. 

Miles, C. and Dowler, W., 2014. A Guide to Business Law. Rozelle, N.S.W.: Thomson Reuters (Professional) Australia Ltd.

Privacy Act 1988

Stewart, A., Oliver, D., McDonald, P., and Hewitt, A., 2018. The nature and prevalence of unlawful unpaid work experience in Australia. Australian Journal of Labour Law, 31(2), pp.157-179.

Yusra, I., Hadya, R., Begawati, N., Istiqomah, L. Afriyeni and Kurniasih, N., 2019. Panel data model estimation: the effect of managerial ownership, capital structure, and company size on corporate value. Journal of Physics: Conference Series, 1175, p.012285.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Business Law Assignment Help

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