A Couple Types Of Business Structure

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Question 1: There are a couple types of business structure in Australia. Businesses in Australia are run by Sole traders, Partnerships, Companies and trading trust. However, each kind of businesses has its own legal rules, purpose and benefits . With organizations the statutory provision is contained in the relevant companies’ legislation . With partnerships the relevant law is contained in the partnership Act in each of the jurisdictions .I will discuss only the partnerships and the companies in term of its business structure, the advantages and disadvantages by conducting business of both types and which one could be preferable to another structure. Partnership: Partnership Act illustrates a partnership as an association of individuals carrying on a business in common with a view of profit . s115 of Corporation Act states that a partnership can just have ultimate of twenty partners (unless in exception of profession such as doctor’s surgeon, veterinarians and solicitors which can have more ). Partners have unlimited personal liability for the debts incurred in the conduct of the business as stated in s9 to s12. The rights and obligations of the partners are determined by reference to the partnership agreement and the relevant partnership Act. In the absence of a contrary agreement, a partnership is dissolved by the death or insolvency of a partner under s33. This action was implemented in Re Megevand; Ex parte Delhasse , when the court held they are partners and partnership exists. There are different type of partnership: Limited Partnership is formed by and on registration of partnership under the partnership Act s48 (1). It must have at least one general partners and at least one limited partner s49 (1). Regarding the liabili... ... middle of paper ... ...ber join or new contribution of the existing member. Issue shares, bonds or other securities Management By the partners themselves as agreed in the agreement By the directors who were allocated by the shareholders Liability Each partner is responsible for the whole partnership obligation. Where shareholder has no individual liability, only his capital contribution involved Taxation Partnership don’t pay tax, but the partner do It pay tax , but at flat rate and its lower than what applying to individual In conclusion, each one of the traders prefer different business structure and that depends on their risk preference and return. Business have a life cycle like any other thing in life. It starts small (sole trader) and get bigger as time pass (Corporation). The advantages and the disadvantages of each structure differ as the requisite of the business shift as well.

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