Business Regulations in Australia - Coursework Example

Business Regulations Name Course Lecturer Date Table of Contents Table of Contents 2 Business planned. 3 The main steps to establish the business, 4 Manufacture Regulation 4 Transport Regulation 5 Distribution Regulation 6 Markets Regulation 7 Australian Consumer law 7 Environmental Regulation 8 Possible business entities to use to conduct the business. 9 Sole Proprietorship 9 Partnership 10 Joint venture 11 The most appropriate entity/entities for the business now and in the future. 11 References 13 Business planned. The client suggested business includes the sale of dairy products with both sit-in and sit-out services. The primary products to be sold are packed and re-packed milk, yogurt, butter, Ice cream and other products for special demands. Some of the other products include chocolate, breads, soups, cakes and muesli bars. The services embodied with the business include packaging and transportation to personal, enterprise and broader premises in accordance to individual and group interests. Most of the prospective customers will be served in their respective business premises and other temporary venues. The aim is to reach various needs of customers who hold meetings in places out of restaurant reach or set-up. The client has an established structure of business management team. The role of General Manager carried by him will coordinate marketing, IT and communication, distribution and supply teams. A core value involved with these products is freshness that client can trust. 90% of sold products will be delivered within 24 hours from the time they are produced, packed and transported to customers. This is meant to produce and sell chemical free beverages, and limit toxins and poisonous related process by avoiding the preservatives. Natural processes and technology will be significant to eliminate unbecoming production techniques that interfere with the natural state of the products. To cater for divers’ clientele, customer specific desserts will be made. This intends to cover many other products that the local, national and international customers may demand. The business will work 24/7 but sit-out services will be limited in some late hours and places located more that a kilometer from the restaurant location. The main steps to establish the business, The dairy food regulatory framework in Australia is under The National Dairy Food Safety Regulatory Framework. This is an integrated system that involves the state and federal regulatory agencies, Dairy Australia, dairy companies and dairy farmers. The basis of the framework is established and revised according to International Codes and Standards. A significant part of this framework requires quality assurance programs with the sectors of supply chain taking responsibility for the food safety. They monitor the potential risks and update various stakeholders regularly. The nature of this business will be immensely affected by manufacture, transport, distribution and market regulations as discussed below (Dairy food regulatory framework, 2007). The restaurant processes, human resource and management will be under scrutiny of various regulators. Manufacture Regulation Modern and automated practices used in milk and various milk products processing use responsible environmental practices. Those who process, require a license from the relevant State Dairy Food Authority. This will be the first requirement to run the dairy products restaurant. Since the products aims at serving sit-out meetings and corporate gathering, it further requires Australian Quarantine and Inspection Service (AQIS) registration. Once the dairy products are delivered to the manufacture, in this case the restaurant, the whole manufacturing process will also require an approval of Food Safety Program (FSP) prior to licensing. Food Safety Program (FSP) encompasses some core elements that the client business will adhere to. These include technologies for pathogen reduction including pasteurization, cleaning and sanitizing, temperature controls, processing and storage. Further, traceability through supply chain involving the whole process from farm to customer, management of post-pasteurization hazards, management of raw materials and ingredients, personal competency and records. Other product specifications will need to reflect compliance with the customer requirements. All the suppliers and ingredients, the chemicals for cleaning, packaging and services must all work to ensure the materials used and services rendered meet exacting requirements. This is especially to those involving traceability of material and ingredients. The business will require establishing Product Recall systems with FSANZ Product Recall Protocol. Its auditors must be approved by the regulatory agencies. The State Dairy Food Authorities and AQIS monitor dairy products quality through their investigations such as AMRA survey. The rigorous part of the regulations is in transport and manufacturing process. This might demand more resources to establish the personnel with the required skills, knowledge and competency. Avoiding the two processes makes it efficient to carry on the business with ease and on a timely manner. Transport Regulation Since the business will also take on sit-out services, transport will be involved. The requirement for all milk operators both in pre and post production transport applies. The business needs a documented FSP approved by the State Dairy Food Authorities (SDFAS). The core elements in this include the control of safety hazard in collection, equipment, containers, vehicles and personnel. Personnel knowledge and skills, time, temperature controls and product traceability. Time and temperature in transport should be managed in order to minimize and regulate food safety risks. The approved frequency of collection and must be followed during peak and off peak season. Prior to collection of milk at the farm, the driver should sample the milk and test following the set typical sets for companies. The fat, protein, microbiological quality, antibiotic residues and somatic cell count are tested. These are presented to farmers and used as payment basis. Any abnormal result detected should follow a prompt notification to the farmer for appropriate action to be taken. When the milk arrives to the production facility, it can be sampled for further testing. The tankers should be cleaned by Cleaning in Place systems with portable water and approved chemicals. There should be a record on the origin as well as the destination f milk supplies, recorded to ensure traceability from both sides. Distribution Regulation Finished products are stored in a warehouse, which happen prior to dispatch of products to customers. An effective implementation of Food Safety Program is required for the warehouse. The warehouse must be licensed by SDFAs. The key elements include the prevention and control of the potential hazards of food safety. Additionally, identification and traceability of product is enabled. The warehouse should establish a Product Recall System. Prior to the loading of product, the interior part of the vehicle and shipping containers cleanliness should be ensured. If require product temperature should be monitored throughout the chain of distribution. The regulations pertaining to warehouse and its management are simple and applicable to new, small-scale manufacturers. Auditors that are approved by the regulatory agencies conduct audits of warehouse. Australian customers and when necessary, international customers conduct all or part of warehouse quality assurance program. Markets Regulation Close commutations is expected with customers to ensure safe quality products and consistent delivery. The retail and ingredients customers in Australia apply rigorous specifications in buying. The typical buying specifications commonly include product specification, the transport conditions and buyers’ expectations in line with quality assurance approach. Competent authorities under State and Federal regulatory agencies help underpin national approach to food quality and safety. Food Standards Code includes all food products that is either manufactured in Australia or imported. The manufacturers, wholesalers, importers and distributors of ay food are required written recall plan that is modeled in line with FSANZ Recall Protocol. AQIS carries ongoing discussions with the State and Federal regulators and also with Industries in order to ensure a maximum harmonization of domestic requirements. Industry and regulators have also established valuable co-regulatory approach. Any export products will be subject to relevant additional regulations and comply with the destination country food and safety regulations. Australian Consumer law Australian Consumer law applies at the levels of State, Federal and Territory. The legal provisions involve consumer protection provisions in Trade Practice Act (TPA). It specifically includes national unfair contract a terms provision, new national product and safety legislative, regulatory framework, new penalties, consumer redress options and enforcement powers. Consumer protection provisions are grouped into four categories. The product safety which provide for a mandatory consumer standards, every product information, notification, voluntary recalls, and order mandatory recalls. Any breach to these provisions causes’ loss and damage allow affected consumers claim compensation. The second prohibit against misleading and deceptive conduct during trade. This provision establishes a norm which, if breached, gives rise to various remedies to those who suffers damage, personal injury or death. All product liability claims include an allegation that the manufacturer or seller engaged in misleading and deceptive conduct. An alleged failure of seller to warn consumer about risk associated with products. Environmental Regulation There is an established Act; The Product Stewardship Act 2011 for product stewardship scheme that hold the relevant parties involved in product chain to share responsibility of those products they produce, purchase, handle, use and discard. This is meant to create a framework for reduction of environmental and impacts of products. This encourages and requires manufacturers, distributors, importers and other persons take responsibility of these products. The core elements of the Act are requirement t avoid, reduce or eliminate waste generation, reduce or eliminate hazardous substances from products and waste products, manage waste from products to make them a resource and ensure that products, waste from products are based on reuse, recycle, recovery, treatment, disposal in a safe, scientific and environmentally sound manner. Product stewardship is build on three principles; voluntary, mandatory and co-regulatory. Voluntary scheme encourage stewardship of products without any regulation need to provide community with certainty by use of logo. Under the scheme, there are audit and report obligations that provide transparency and accountability of these actions. Co-regulatory scheme is delivered by industry with the outcomes, basic operational requirements which are specified. A company benefits by participating and thresholds are applied in order to avoid the impacts by small business. The mandatory scheme set obligations for certain actions on parties in relation to their product. The obligation requires product labeling, producer responsibility to take back the product for recycling at its end of life and deposit and refund is applied to a product. This will apply as their product requires thick packaging and the mode of their sit-out services that is involved with packaging disposal (Hyams, 2011). Possible business entities to use to conduct the business. The regulations governing specific types of entity differ. The legal responsibilities, when creating a business depend on business entity chosen. The possible business entities for the client may include sole trader, partnership or limited liability business. An analysis of each entity will inform the client on the best to go by depending on financial, regulatory and day-to-day requirements (Chaudhri & Samson, 2000). Sole Proprietorship Sole trader is owned and run by an individual with no legal distinction between the business and the owner. The client will receive all the profits and will have unlimited responsibility for losses and debts. The assets and debts will be his. The rules and regulations involved are not cumbersome. The rule on it does not permit many employees. The personal assets and business assets are same for liability purposes. Protection or adequate insurance is important since claims against business can lead to seizing of assets or home. It is a must to file various taxation forms with Internal Revenue Service. Included herein is the 1040 personal income tax return, with Schedule C, SE and ES for business [profit and loss, self-employment and estimated taxes respectively. He must file for himself W-2 wage and tax statement, Medicare, income tax withholding and Social Security. Good estate planning is an essential due to problems that arise in death, incorporation or change of business operation. Partnership The client may arrange with another party or parties to cooperate and advance mutual interest. They will co-labor to realize and distribute profits and losses. The parties involved have special challenges that they need to navigate unto agreement. The overarching goals, give-and-take levels, responsibility areas, authority and succession lines, evaluation and distribution of success and other factors however have to be negotiated. In short, there has to be mutuality of obligations, interests and rights. In this business case, the partnership is not categorized under professional partnerships. So the number of people is limited in size. It will not be a separate legal unit. As required, partners will share profits and jointly or separately be liable for partnership obligations. However, in some States, a limited partnership can be established where some partners have liability which is limited to capital contribution. Limited liability partners cannot take part in management of partnership. Partnership is governed under Australian State laws, contract law and common law. Partnerships are subject to undergo through taxation treatment; the shares of profit /loss are taxed at partner’s level. A partnership must file information tax return. Capital gains and or losses in partnership interests and assets are made by partners individually. Additionally, certain categories of hybrid limited partnerships with those of limited liability companies can qualify for such partnership treatment. Corporate limited partnerships, however, are taxed as companies. Joint venture Depending on the owners this entity has characteristics of sole proprietorship, partnership and corporation. A joint venture involves two or more people or companies carrying on a business. It is normally formed for particular product or project or where contributions of individuals are different in amount, type or timing. Joint ventures are incorporated; separate legal entity or unincorporated. Its rights and liabilities will depend upon those terms the joint venture sets. Joint ventures in Australia are governed by contract law and common law. Joint ventures participants who receive income in a joint way may be subjected to taxation just as tax partners. Some circumstances require joint separate ventures to derive individual shares of joint venture proceeds in all respects, treated like separate taxpayers. The most appropriate entity/entities for the business now and in the future. This kind of business has particularly two most applicable and appropriate entities; sole proprietorship and partnership. In the first case, it will allow fast decision making and implementation. This will increase and make use of every possibility and culminate to business progress and profits. It will be possible to assume a common management in future as the restaurant establishes subsidiary. Since, the profit is not shared, the business is potentially capable of expanding by taking marketing and customer relationship in a significant manner. The firm growth will be determined by firm-specific factors including indebtedness, product and process innovation, internal financing, organizational changes and future growth opportunities. Growth in a manufacturing and service business will be effected by specific restaurant characteristics like internally generated funds, leverage, future growth opportunities, current liquidity, and productivity factor. They are important in determining the firm’s performance and growth. Some policy which are favorable to sole trader has implications as government pay increased attention to such enterprises and create business environment that are beneficial for their development. Business partnership on the other hand can help the business grow and at the same time expand. Having the right partners can grow the business. This is due to shared responsibilities, creating networks and source to more capital, assets and human resource. Funding for partnership is more secure and this is usually paid back in a period of three years in most cases. The management team is in charge and thus, day-to-day activities of running the business are ensured. Support services and expertise can be easily accessed. When profit and risks are shared, a balance is ensured. In future, the business can establish units and split equally. References Dairy Australia, (2007). Dairy food regulatory framework, http://www.dairyaustralia.com.au, retrieved 2013, Jan 19. Hyams, M. (2011). Australia: Waste Reduction Through Environmental Regulation. Retrieved on 19 Jan 2013 frm Mondaq:http:// www.mondaq.com/ Chaudhri, V., & Samson, D. (2000). Business-government relations in Australia: Cooperating through task forces. The Academy of Management Executive,14(3), 16-24. Read More