Choosing The Appropriate Structure Of The Business Practice Essay

Choosing The Appropriate Structure Of The Business Practice Essay

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5.0 Analysis
Choosing the appropriate structure of the business practice is a complex exercise and whole range of factors need to be analysed. One must not only analyses current circumstances but also consider the future plans and the effect of the business structure on these future plans. Following is the brief overview of the factors which should be considered before finalising the business structure.
5.1 Costs of registration and ongoing costs- Incorporation of the business in Australia attracts the registration costs and must get the certification under section s118 and 1274 (Harris et al. 2011, p. 75). These charges are more than just registration the business name. Registration fess can be found on the ASIC website under Schedules of corporations fees. Incorporated companies also subjects to post-registered requirement which incurred more costs.
5.2 Limited Liability-As described earlier, member of the incorporated bodies have limited or no liability for corporate debts. However, where personal guarantee has been provided by company, director or directors did not perform the duty to avoid insolvent trading (s 588M), directors can be personal liable (Harris et al. 2011, p. 564). This is evident in Commonwealth Bank Ltd v Friedrich (1991). In case of partnership, partners are fully liable for the other partner’s actions and expose to greater level of risk. According to Hanrahan et al., (2013, p. 99), limited liability is a privilege which enables the economic growth. I am agree with the fact that limited liability enables growth especially for the industries who worked in high risk environment.
5.3 Financial requirements- It is easier for the incorporations to raise funds as compare other business forms. Passive investors can ...


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... 52).
The main feature of the incorporation is the assumption of “separate legal entity”. For this reason, anything that did not impact directly on financial position or financial performance of the corporation was ignored. Certain government regulation are now encouraging the CSR reporting such as s. 299(1) (f) of the corporation act and National Greenhouse and Energy Reporting Act 2007 (Cwlth) (NGER Act) (Beck et al., 2014, p. 5.49).
Size of the Incorporation has significant impact upon the CSR reporting. According to Maximiano (2005), bigger incorporation tend to emphasize more on CSR. While deciding about business structure one must take into consider the sustainable growth factoring social and environmental factors. My opinion is that an incorporation should emphasis on the CSR regardless of size as sustainable growth is the key for continue success of business.

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