BUSINESS AND CORPORATION LAW.

Running Head: BUSINESS AND CORPORATION LAW 0
Commercial and Corporation law
4/20/2019
Student’s Name

Commercial and Corporation Law
1
Part A
Sole Trader, partnership firm, and proprietary company are different business structures, which
are available for the people. In the presented part, the focus will be made on the setup and
administrative burdens of these structures. Starting from the sole trader, this is to state that it is
an enterprise owned and administered by a single person. This is the easiest form of business as
no legal formalities are involved in the same. Registration of business is required in Australia
unless a business is falling under a category of exemption. The cost of registration of business is
$36 for one year, which is applicable to sole trader too1. A separate bank account is not required
in case of sole trader and it saves the bank and other related maintenance costs. The
administrative burden in case of sole trader ship remains on the sole trader/owner. He/she is the
person who takes all the responsibility, profits, and business decisions. Further, as a sole trader, a
person is required to keep the accounts for at least five years that includes a cost factor.
The partnership is another business structure, which consists of two or more people. The
registrations cost of the business remains the same as sole trader ship. In order to establish a
partnership, one is required to get business name registration, Australian business number,
separate bank account, and trademark registration that cost more in comparison to sole trader
structure. If to discuss the administrative burden in case of a partnership, this is to state that all
the partners are liable to administer the business in general. They may mutually decide the
particular area of administration for each partner.
1 Business.gov.au, What are the set-up steps and costs? (Web Page) <https://www.business.gov.au/change-and-
growth/restructuring/sole-trader-to-a-company/difference-between-a-sole-trader-and-a-company/what-are-the-set-
up-steps-and-costs>.

Commercial and Corporation Law
2
The company on a different side is the most formal and defined business structure. In Australia,
every company is required to be registered with ASIC. The cost of registration of a proprietary
company is $488. In addition to this, $263 is the annual review fee in case of proprietary
company registered with ASIC2. In this structure, Directors and officers of the company have the
entire administrative burden.
Part B
Starting from the partnership structure this is to state that a partnership firm is not a separate
legal entity and therefore the partners of the firm are personally liable towards the third party.
Every state of Australia has different legislation to govern this business structure but provisions
of the same are almost similar to each other3. A partner has an agency relationship with the firm
as well as with other partners and the same can enter into a contract with the third party on behalf
of the firm and because of no separate existence of the firm, all the debts of the firm consider as
the personal debts of partners. In other words, this is to say that the partner of a firm has
unlimited liability to the third party who deals with the firm except in a few situations. Partners
are not only liable for their acts to the third party but they are also liable for the acts of other
partners that deal with third parties on behalf of others. Section 9 of Partnership Act 19814 stated
that partners of the firm are liable for all the transactions that have been done with the third
parties on behalf of the firm. Further section 12 summaries the liability of partners of the firm.
This section says that every partner is liable for the debts of the firm severally and jointly in a
personal manner. Under this agency relationship, two types of authorities are there to the parties
one is expressed and another one is implied. The express authority of a partner comes from the
2 Asic.gov.au, Your business structure (Web Page) < https://asic.gov.au/for-business/your-business/your-business-
structure/>.
3 Nfplaw.org.au, Joint Ventures and Partnerships (Web Page) < https://www.nfplaw.org.au/partnerships>.
4 Partnership Act 1981 (Qld)