(pdf) Assignment on Business Law

Running head: BUSINESS LAW 0
Business
Law
Advantages and
Disadvantages
of Different
Business
Structures

BUSINESS LAW 1
Table of Contents
Introduction................................................................................................................................2
Business Structures in Australia.................................................................................................3
Woolworths Limited..................................................................................................................4
Comparing with Other Structures..............................................................................................5
Sole Trade..............................................................................................................................5
Partnership..............................................................................................................................6
Trust.......................................................................................................................................7
Conclusion..................................................................................................................................9
References................................................................................................................................10

BUSINESS LAW 2
Introduction
Australia is a parliamentary democracy, and the constitution of 1901 provides
provisions for the establishment of a federal government system in the country. The legal
system divides power between national government (Commonwealth) and six states (UTAS,
2018). The constitution distributes the law-making powers between Commonwealth and
States. The legal system in Australia is heavily influenced by the English, and the two major
sources of law include cases and legislation (Australian National University, 2018). The cases
include decision given by judges in the courts and legislation includes laws made by the
parliament. The national and state government has implemented different laws for businesses
to protect customers and to promote fair trading and competition. While starting a new
business, owners have to decide the legal structure based on which they have to comply with
different requirements. This report will analyse the legal system in Australia in context to
businesses and assesses different business structures. This report will evaluate the business
structure of Woolworths Limited and discuss its advantages and disadvantages. Further, the
report will compare the merits and limitations of different business structure and examine
how legal system affects their operations.

BUSINESS LAW 3
Business Structures in Australia
There are four different legal structures for businesses operating in Australia.
 Sole trader: In this structure, a person is responsible for all aspects of the business. A
sole trader can hire other employees for performing business tasks, however, only
he/she is responsible for its actions. In case the business failed to repay its debts, the
court can use personal properties of the sole trader to pay such debts (Department of
Industry, Innovation and Science, 2018).
 Company: A company is created as per the provisions of Corporations Act 2001, and
it has a separate legal entity from its owners or shareholders (Department of Industry,
Innovation and Science, 2017a).
 Partnership: It is referred to an association of individuals who joined together to run
a business (Department of Industry, Innovation and Science, 2017b).
 Trust: It is referred to an arrangement whereby an entity holds income or property as
a nominal owner for the benefit of others (Department of Industry, Innovation and
Science, 2017c).
As per the legal system in Australia, businesses have to register themselves before
commencing any business activities. However, the registration requirement differs based on
the structure of the business. Businesses also have to comply with different legal
requirements such as taxation laws, fair trading regulations, employment laws, consumer
acts, the law of torts, contract law, privacy act and others (JD Supra, 2015). Based on the
structure of a business, different liabilities and obligations are required to comply by a
business relating to tax liability, asset protection, expenses, reporting and others. Businesses
are requiring assessing the legal context in which they operate and ensure that they comply
with its requirements to avoid legal consequences.
The laws in Australia are created, changed and applied by the parliament in Australia.
Firstly, a draft of the proposed law is presented to the parliament in the form of a bill.
Generally, proposed laws are presented in the parliament by the government. A bill can be
presented in either of the house (Skwirk, 2018). The ministers than discuss the bill and make
necessary changes to it and opinions from the public regarding the bill are considered as well.
After making requirement changes, the bill is presented in the parliament to be passed in
identical form by both the houses of the parliament. After passing the bill in the parliament, it