Australian Business Law - Case Study Example

CASE STUDY: AUSTRALIAN BUSINESS LAW By Student’s Name Code + Course Name Professor’s Name University/College Name City, State Date Case Study 1.1: Legal Forms of Doing Business Business Location The hamburger restaurant is to be located in Elizabeth Vale, along the Main North Road. The Suburb of Elizabeth Vale is located towards Adelaide’s northern extent in South Australia. Various factors were considered in the selection of the location of the business, the major one being the exposure that the business will have to the customers (Greene, 2011, p. 220). Being a major highway, the Main North Road is used by various travelers transiting Adelaide towards other suburbs in different cities within South Australia. This creates a great opportunity for the food based business as some of the travelers may prefer to stop by for hamburgers. Registration of the business name The selected name for the hamburger restaurant is “HamburNosh”. To register this name, there are various steps that ought to be considered. The Australian Securities and Investments Commission (ASIC) oversees the process of registration of business names. The first step involves making an application for an Australian Business Number (ABN) (ASIC, 2015). The next step shall entail using the ASIC’s website “check name availability” handle to see if the name “HamburNoch” exists within the registered names database (Australian Government, 2015). Upon confirmation of non-existence of the name, it can be registered online. Business Model HamburNoch is provided with three options within which it can run its business including as a sole trader, partnership, or a company. In South Australia, there are no laws specifically governing sole traders (South Australian Government, 2015). As such, setting up this type of business is much easier as compared to the other models. On the other hand, a Company is governed by the Corporations Act 2001. Under the Act, a corporation is defined as a legal entity that is separated from the owners and has limited liability and legal capacity (Cassidy, 2006, p. 8). HamburNoch cannot be run as a Company, majorly because of the high cost of establishment. Thus, HamBurNoch will be established as a Partnership, given the business’ need of financial support in terms of the starting capital and the willingness of Tom to invest into half of the start-up capital. The partnership business model is governed by the Partnership Act, with equity and common law rules also applying. One of the legal provisions of partnership type of business is the limitedness in the number of partners, which requires that the partnering individuals should not be more than 20 (University of South Australia, 2015). Another provision is the aspect of “business in common”, where both of us will be working for each other within the business (BDO Kendalls, 2009, p. 114). Our intentions of making a profit also qualify our arrangement as a partnership. One of the advantages of this business model is that it is less expensive to start and run. In addition, it holds less risk as losses and liabilities are spread across the partners. Similarly, partnership allows for easier management as the roles are spread among the partners. In addition, the partners may experience advantages in terms of tax planning due to income splitting. However, one of the prime disadvantages of this model involves loss of control over the management (BDO Kendalls, 2009, p. 115). Unlike the sole trader, the partnership requires consultation among the partners for decisions to be made concerning strategy and the general direction of the business. In addition, partnership does not provide for limited liability, and thus poor decisions made by the other partners will still spread to the rest of the partners (Mercantile Credit v Garrod, 1962; Dubai Aluminium Co Ltd v Salaam, 2003). Last but not least, partnerships are not permanent as the business and the partners are synonymous, and thus the existence of the business may be threatened if one partner leaves as they leave a gap in terms of capital supply. Case Study 1.2: Employing Staff It would not be possible to dismiss Ben immediately as this would be in violation of the "Small Business Fair Dismissal Code", that requires me to offer Ben a warning stating the possibility of dismissal, preferably a written one, in the presence of a witness (Fair Work Commission, 2014). It is then required that I give him a reasonable chance to make amends to the previously shown misconduct, failure of which I shall be free to dismiss him at will, without it being categorized as either harsh, unreasonable, or unjust by Fair Work Australia during their assessment of the case. In addition, provisions of rights and obligations under partnership require Tom and me to share any information pertaining the business before making any decisions and thus I am obligated to inform Tom of Ben’s case before we can jointly come up with a solution. Making decisions that may affect the business’ structure such as dismissing Ben without informing Tom may make me liable of breaching the fiduciary relationship that exists between us (Battye v Shammall, 2005). According to Section 45 subsection 46(1) of the Fair Work Act 2009, contravention of any modern award is an offense (Commonwealth Consolidated Acts, 2013). Thus, denial of Carol her awards may attract a penalty as high as $6,600 as it is prescribed in the Fair Work Act 2009. On the other hand, since Donna is categorized as an employee and suffered an injury within the premise, the business is liable for her injuries. Common law requires employers to compensate any workers that suffer injuries at the workplace while on duty. In addition, South Australia’s WorkCover Corporation Act 1994 and the Workers Rehabilitation and Compensation Act 1986 require all the employers to seek a licensed insurer that will provide compensation insurance to all the workers, failure of which may lead to legal fines (Hardy & Rundle, 2010, p. 374). In Eddie’s case, he is an independent contractor since he is only at service on call and does not exclusively work for my restaurant but instead also contracts his services to a different restaurant. Unlike in the case of Hollis v Vabu Pty Ltd (2001) 207 CLR 21 where the courier was categorized as an employee as they wore uniforms and had set payments, Eddie does not put on our business’ uniform as he also renders his services to a different restaurant and only avails his services on call and thus is paid per service rendered (Hollis v Vabu Pty Ltd, 2001). This means that there are no set payments that are made at a certain point but payments depend on the services rendered. As such, our business is not liable for the injuries suffered by the pedestrian. Case Study 1.3: Dealing with customers Carol’s case represents an unfair term since it is detrimental to the customers. With reference to Section 29 of the Australian Consumer Law (ACL), if a surcharge is charged on a certain day in the case of food-related businesses, it should be factored in on the menu on a separate column, with a clear description of the surcharge in amount and the days it is charged (Australian Consumer Law, 2014). It is important for these words to be clearly displayed for the customers to see. In Carol’s case, she has not indicated a surcharge on the menu and makes an impulsive move to change the menu and increase the price without initially informing the consumers. This is in violation of Section 29 of the ACL (Commonwealth Consolidated Acts, 2013). The business conduct involving the naming of the new hamburger MacKenzie is in violation of the ACL since it may cause an impression of the product originating from McDonald’s Corporation among the consumers and lead them to purchase it under such an impression. As much as the name is not intended to deceive or mislead the consumers, this remains irrelevant (ACCC v Harvey Norman Holdings, 2011). What is important is that the name could affect the beliefs and thoughts of the consumers. Advertising that profits from the sales go to charity when it is not the case is a false representation and a violation of section 29 of the ACL, which requires businesses to desist from making any false representations that they have approval, sponsorship, or affiliation that they do not really have (Eivazi, 2014, p. 580). Such a move that links the business with a charity creates an impression of helping the needy through purchasing of the hamburger among the customers and draws more customers to the restaurant out of their philanthropy, creating unfair competition. The consumer law protects the consumers from acts of extortion by businesses. Lying about the freshness of the products is deceptive conduct and false under section 29 of the ACL which prohibits against false representation (Manacorda, et al., 2014, p. 427). This is in violation of the law as an impression of freshness of the products is created among the consumers when in actual sense the burgers are not fresh. Section 18 of the ACL also prohibits the provision of false and misleading terms in relation to certain products, violation of which is prosecutable under the law (Latimer, 2012, p. 550). References ACCC v Harvey Norman Holdings (2011) Supreme Court Reporter. ASIC, 2015. Registering a Business Name. [Online] Available at: http://asic.gov.au/for-business/registering-a-business-name/ [Accessed 7 October 2015]. Australian Consumer Law, 2014. The Australian Consumer Law. [Online] Available at: http://www.consumerlaw.gov.au/content/content.aspx?doc=the_acl/legislation.htm [Accessed 8 October 2015]. Australian Government, 2015. Register your business name. [Online] Available at: http://www.business.gov.au/registration-and-licences/Pages/register-your-business-name.aspx [Accessed 7 October 2015]. Battye v Shammall (2005) Supreme Court Reporter. BDO Kendalls, 2009. Australian Master Accountants Guide. Sydney, NSW: CCH Australia Limited. Cassidy, J., 2006. Concise Corporations Law. Melbourne: Federation Press. Commonwealth Consolidated Acts, 2013. Fair Work Act 2009 - Sect 46: The significance of a modern award applying to a person. [Online] Available at: http://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/s46.html [Accessed 7 October 2015]. Commonwealth Consolidated Acts, 2013. Competition and Consumer Act 2010 - Schedule 2: The Australian Consumer Law. [Online] Available at: http://www.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2.html [Accessed 8 October 2015]. Dubai Aluminium Co Ltd v Salaam (2003) Supreme Court Reporter. Eivazi, K., 2014. Google liability for misleading or deceptive conduct: Australian perspective. Computer Law & Security Review, 30(5), p. 579–585. Fair Work Commission, 2014. Small Business Fair Dismissal Code. [Online] Available at: https://www.fwc.gov.au/about-us/legislation-regulations/small-business-fair-dismissal-code [Accessed 6 October 2015]. Greene, C., 2011. Entrepreneurship: Ideas in Action. Boston, MA: Cengage Learning. Hardy, S. & Rundle, O., 2010. Mediation for Lawyers. New South Wales: CCH Australia Limited. Hollis v Vabu Pty Ltd (2001) Supreme Court Reporter. Latimer, P., 2012. Australian Business Law 2012. New South Wales: CCH Australia Limited. Manacorda, S., Centonze, F. & Forti, G. eds., 2014. Preventing Corporate Corruption: The Anti-Bribery Compliance Model. Bloomington: Springer Science & Business. Mercantile Credit v Garrod (1962) Supreme Court Reporter. South Australian Government, 2015. Sole Trader. [Online] Available at: https://www.sa.gov.au/topics/business-industry-and-trade/starting-a-business/business-structures/sole-trader [Accessed 6 October 2015]. University of South Australia, 2015. Partnerships, Joint Ventures, compared to Corporations. [Online] Available at: http://resource.unisa.edu.au/mod/book/print.php?id=21929&chapterid=9592 [Accessed 7 October 2015]. Read More