The Type of Business Structure - Case Study Example

Name Course Professor Date MLA Company law Appropriate business structure The type of business structure adopted contribute much to the success of the firm. There are many types of business structure in Australia that contain both advantages and disadvantages. For the case of Mary, Jack, and Will, the best business structure to adopt is the general partnership. This the type of business where they exist the relationship between two or more people to carry on the firm in corporate with the aim of making the profit. Therefore in this type of business structure, Jack, Will, and Mary will own the business and the three shareholders will be in control of all assets and all of the profits that will be obtained from this business will jointly belong to them.1 Also, they will raise the finance and share the contribution and risk to the business. However, this business structure is not a separate legal entity (Partnership act, 1958) Also, all of them will held liable for their dealing with the third person. Moreover, each partner will have equal right to participate in control and management of the business. The disagreement in the course of the partnership will be defined by the majority of partners, and differences of matters that are extraordinary and changes to the agreement of partnership will need all partners’ consent. Nevertheless, the agreement of partnership will provide individual members to control the business along the line of the board of the company. Besides, no one can become a business member without the agreement of other partners, though a partner may assign his losses to share or profit share and right to obtain distributions. Also, the judgement of the partner’s creditor may get an order charging the transferable interest of the partner to fulfil the resolution.2 I recommend this business structure to Jack, Will and Mary because it simple to start. For instance, it is relatively easy to start since no much money is needed. Also, the ability to raise fund is high since both Jack, Will and Mary will contribute the money quickly to start the business. Moreover, the business’s profit flow will be directly through the personal tax of the partners. Besides, the prospective employees may want to join the business if given incentives as well the business structure will benefit from both Jack, Will, and Mary, who have the skills that are complementary. Moreover, there is less regulation and interference from the government as well has less need for hiring accountants, lawyers, and other consultants. Another advantage of this business structure is that it has a lot of privacy, and it has management base that is broader. Jack, Will, and Mary need to decide whether to run the business under their names or the business name. If they choose to execute the business under their names, they will need to register it in the Business Number of the Australian for the exclusive partnership. They also need to apply for the registration of the company to ASIC. For registration of the enterprise, ASIC need requires more than one shareholder. Also, to obtain certification, they must complete the ASIC form.3 Then the member will manage, administer or deal with their properties that will be situated in Australia as legal persons. Also, they should attend meetings of the shareholders to discuss the internal affairs or other activities. Also, Jack, Will, and Mary should obtain the Business Tax File Number for their individual return of the income tax, on the other hand, the Tax File Number for the whole business is needed. This implies that the partnership will lodge its different return of tax apart from the individual tax return lodging. However, the partnership itself is not responsible for paying the tax. Instead, the income of the person obtained from the run will be included in their personal return of revenue. Therefore, the tax is paid on the generated income by the partnership which means that any income that will come out of partnership is counted as the individual income of the members. By default, the law undertakes that the earnings or losses or profits will be divided equally among them. According to the partnership act (1958), for security purpose, Jack, Will and Mary should maintain the bank account as well create the debt evidence or create the interest of security in property including the retention of PPSA of the body’s title property. They should also effect the auction of the chairs through an outworker who is independent. Besides, they should enforce the rights concerning the debt security.4 Legal advice when Jack uses the savings of partnership. According to business act section seven, when a partner uses the firm’s credit for his or her purpose, the organization is not bound unless the partner is authorized by others. Therefore, according to this case of Jack where she uses the partnership money to purchase the expensive watch and suit without informing other partners which is against the partnership act. This means the savings of partnership that was used by Jack for individual benefit will not fix the agreement of partnership since he was not authorized by other shareholders. Hence, Jack will be charged by the law and held responsible for the saving he used5. Other members including Will and Mary will not be liable to pay for the used conservation. Hence, the court will charge Jack to use his means and pay for the saving that he consumed for the personal use. Also, in the partnership act section, 6 says that an action related to the firm of partnership, and indicating a purpose of binding any person who was authorized, whether is a member of a partnership or not, is fixing the partner and farm of partnership. Hence, this section means that act performed with the aim of binding the firm will bind the partnership firm. However, the members will not be bound where the person played the actor signed the document, even if related to the partnership business if it was done for the individual benefit and not on behalf of the firm. Therefore, according to the case of Jack, buying the expensive watch and suit are not for the benefit of Attento–Chair. Legal advice to take due malfunction of chair According to the partnership act of 1958, the product has the liability in which the suppliers, manufacturers, distributors, and retailers should be accountable for any damage the product cause. Regardless of any limitation of contractual, if any component of the product or the product itself are malfunctioning the manufacturer should be responsible. Under this act, the malfunctioning can cause death, damage the private property or cause personal injury. Neither of the deeds can be used to consequential loss. Therefore for the case of the partnership of Jack, Will, and Mary, the malfunction of chairs is a grave offence since it caused the number of student to the server. The organization members should be liable for damage of their chairs. Hence, the student should sue the partnership to compensate them for the burnt since seats belong to that business. Specifically, Jack should be liable to pay the burnt student since he used the money for his individual interest instead of purchasing the sufficient chairs. Advice on whether Ken to access the partnership records The partnership act says that each partner must have access to the files of partnership, and he or she is justified to copy and inspect them if there is a need. These partnership books include the record of financial transactions of the partnership and the contribution of each partner. Also, these books are kept in the principle partnership place of business. The law also says that a partner is denied a chance to access the book, he or she has a right to get an injunction from the court the force the partnership to give the partner the opportunity to inspect the books. Moreover, a partner has a right to demand partnership account of its affairs.6 The law also allow for book-keeping of one partner is excluded from the business of the partnership or if co-partner misuses the partnership fund. Therefore, Ken has a right to access the accounting books and demand accounting since he also invested his money in the partnership. Also, since he is not being informed on how the business operates, he should demand an accounting. If the partnership members deny him that chance, he should take him to court (Partnership act, 1958) . Conclusion To sum up, partnership binds two or more members to operate a business aiming at making a profit. Therefore, the partnership members should have written agreement on how to operate the business. The member should also follow the business law to succeed in their business. Finally, all partners should be allowed to access the partnership books of accounting. Work cited. Top of Form Burrows, A S. English Private Law. , 2013. Print. Cross, Maurice C. Types of Business Enterprise, Structure and Control. New York: Prentice-Hall, 1929. Print. Higgins, P F. P. The Law of Partnership in Australia and New Zealand. Sydney: Law Book Co, 1970. Print Kauffman, Kent D. Legal Ethics. Albany, N.Y: Delmar, 2013. Print. Miller, Lori K. Sport Business Management. Gaithersburg, Md: Aspen Publishers, 1997. Print. Partnership act, 1958. Suarin, Mary A. V. Guidebook on Public-Private Partnership in Hospital Management. , 2013. Print. Treviño, Linda K, and Katherine A. Nelson. Managing Business Ethics: Straight Talk About How to Do It Right. New York: John Wiley, 2011. Print. Bottom of Form Read More