The Case Scenario on Business Structures of Obama and Osaka: Assessment Task 2 Answer
There are number of business structures that the Obama and Osaka can choose in operating the business. There are various advantages and disadvantages of business structure that are necessary in identifying the parties to ensure that they are selecting the most suitable business for their business. It is the memorandum of advice such as trusts, partnerships and companies that are available for Emma and Oliver. In this various rights, liabilities and duties associated with the business structures will be analyzed in this essay.
- It does not have complex legal requirements
- Partners act as agent for each other
- Easy to establish as compared to other business structures (Ratten, and Dana, 2015)
- Jointly and severable will be liable for the act of other partner
- The creditors in this have the right to sue the all partner or any partner individually
- The money received by any of the partner will be mutualised with the other partners (Ratten, and Dana, 2015)
- Corporation has separate legal identity
- Directors will not been held personally liable for the debts of the company.
- Owner personal assets will not been used for paying off the company’s debts
- The shares of the company are easy to transfer.
- The share capital can easily been raised by the companies (Ratten, and Dana, 2015)
- It is very expensive to incorporate a corporation
- A heavy registration fees have to be paid by the members on the registration of the company
- The financial statements of the company are public.
- The liability of the directors will be unlimited on violation of their director duties that is given under the Corporation Act 2001 (CTH) (Burritt, Guthrie, JEvans, and Christ, 2017).
- Income has been distributed will on of trustee’s discretion to the beneficiaries from the third party creditors (Ratten, and Dana, 2015)
- Complex and expensive process of establishment and there are problems that arise in dissolution.
- There is a difficulty while borrowing the loans and there is a limit of powers in trust deed
- A set period of trust has been given in the trust deed and they will be personally liable for the debts of the assets (Ratten, and Dana, 2015).
On seeing the advantages and disadvantages of the three structures it can be advised to Obama and Osaka that they can choose the partnership firm because for the economical business the Partnership will be advised to them.
It is very easy to register a partnership. The legal structure of partnership has been governed by the Partnership Act 1891 (Qld) that provides the key provisions in governing the legal structure. The term has been defined under section 5 of the Partnership Act. The partners are required to register the partnership under the provisions of these laws. The agreement of partnership can be made either in writing or orally. There are various things that are required to do for the contract of Partnership:-
- Parties name and address of the business
- Firm name and partners
- Method of Dissolution
- Capital in the Partnership (Köhr, Corsi, Capitello, and Gergely Szolnoki, 2016)
If Obama and Osaka will go for company, than they have to go on the Website of ASIC. There is the form which is required to be filled according to the Corporations Act 2001. The company will be registered (Ratten, and Dana, 2015).
The provision of the trust has been provi0ded under Trusts Act 1973 (Qld). In trust there is required to mention the trustees and beneficiaries (Ratten, and Dana, 2015).