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Business and Corporation Law

Table of Contents

Introduction

Business Structure

1. Sole Trader

2. Partnership

2.1. General Partnership

2.2. Limited partnership

2.3. Incorporates limited partnership

Conclusion

References

Introduction to Business and Corporation Law

In the light of present facts and circumstances of the case, Harry is interested in starting a business and has thought to start a bakery. Harry is a qualified person and also knows the bakery business which includes everything related to bakery either it is baking cake, bread, or pastries. Harry has saved money for the business and also have seen a shop to operate his business. The amount saved for the business is $50,000.0 in cash.

Business Structure

As an advisor to Harry under the Corporation Act 2001 (Cth), the business structure that will be suitable for Harry and his business of bakery shall be as follows:

1. Sole Trader

A sole trader is the easiest and simplest method of business, especially for freshers. It is inexpensive and can be set up with less effort and time. Being a sole trader, an individual is legally responsible for every aspect of business and establishment of the business, each profit and loss, all the decisions and earning of profit in day to day business under the responsibility of the sole trader (Ghezzi & Cavallo, 2020). The key element for such elements is most likely to cause benefits to the employer as it is simple to operate and set up, provides a clear decision, and gives the power to have full control over the business, allows an individual to use its tax file number and lodge tax returns. It also does not require any separate business bank account or any kind of recommendations and therefore, makes it easier to track the business income and expenses. It also helps in keeping the record for financial requirements of at least 5 years (Australian Government, 2020). It has unlimited liability and personal but personal assets are at risk if things go wrong. Other employs can be kept to run the business under the sole trader structure.

2. Partnership

A partnership is a business structure that is made up of 2 or more than 2 people who carry equal income and distribution in both profit and losses amongst themselves (Ghauri, Gronhaug & Strange, 2020).

The partnership is divided into three kinds:

2.1. General Partnership

A partnership where all the partners are equally responsible for the consequences of the business and each one the member has the ultimate liability on the debts and obligations when occurring (Australian Government, 2020).

2.2. Limited partnership

The partnership which is made up of general partners and whose liability is limited to the amount of the money and have the contribution in the partnership limited partnership are usually the passive investors and they do not play any role in the daily management regarding the business.

2.3. Incorporates limited partnership

This is a partnership that has limited liability for the business and debts. Under this particular partnership, there must be at least one general partner with unlimited liabilities and power. If the business does not meet the requirements, the obligations are on the general partner and it personally becomes liable for the downfall of business (Australian Government, 2020).

Conclusion on Business and Corporation Law

As per the abovementioned facts and the circumstances of the matter, the clear advice to Harry is to invest in the business and for the startup of the business, the mentioned structure shall be beneficial and profitable. Both the plans and strategies are set for fulfilling the requirements of the freshers in the market who establish their new business and have the aim of more profit rather than loss.

References for Business and Corporation Law

Australian Government, (2020). Business structures. Retrieved from: https://www.business.gov.au/Planning/Business-structures-and-types/Business-structures#:~:text=The%204%20most%20common%20types,who%20distribute%20income%20or%20losses

Ghauri, P., Gronhaug, K, & Strange, R. (2020). Research Methods in Business Studies. Cambridge University Press.

Ghezzi, A., & Cavallo, A. (2020). Agile business model innovation in digital entrepreneurship: Lean startup approaches. Journal of business research, 110, 519-537. DOI: https://doi.org/10.1016/j.jbusres.2018.06.013

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