TLAW202 Corporations Law Assignment

   

Added on  2020-05-11

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1Title of the Paper:Student Name:Institution:
TLAW202 Corporations Law Assignment_1
2Question 1:Answer: After going through the facts that are present in this question, it has to be considered,which business structure will be most appropriate for Richard and his sons because they arewilling to expand their business. It appears that in the present case, the incorporation of acompany will be the most suitable choice for Richard and his sons. The reason is that severalbenefits will be available to them as compared to running their business as a sole trader orpartnership. Therefore if Richard decides to incorporate a company, several benefits will beavailable to them due to which it will be easier for him to expand the business. For example, it iseasier for a company to raise funds for the expansion of the business. Even if the cost incurred inregistering the company is higher than running the business as a sole trader or partnership, butthis cost can be treated as a part of business expenses. In the same way, if Richard decides toregister business name only, it will be less costly as against registering a company but in such acase, the benefits of incorporating a company will not be available. However, the law providesthat if Richard and his sons decide to incorporate a company, there is no need for the registrationof the business name. When a company is registered, company’s full name ending with "Pty Ltd"can be used either by these. Regarding the ongoing costs of the business, it is required under thelaw that there is a need for the renewal of the registration of the business name. For doing so, afee has to be paid to the government. In case of a company, the Australian Securities andInvestments Commission charge the annual renewal fee.When the owner of a business decides to incorporate the company, a significant advantage isavailable to such a person in the form of the Limited liability of the owners. According to thelaw, when a company has been incorporated, the shareholders and directors of such a corporation
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3are only liable to the extent of their shares in the company. On the other hand, when the businessis being run as a sole trader or partnership, the owner of the business is personally liable for theobligations of the business (Harris, Hargovan, Adams, 2015). Another significant advantage thatis available to the persons who have incorporated a company in order to run their business isconcerned with the rate of tax. They provided the persons managing business by registering abusiness name are required to pay tax at the normal marginal rate. On the other hand, a flat rateapplies in case of a company, which is much less than the rate that applies in case of individuals(Vermeesch and Lindgren, 2005).A company is also allowed to own property, and also to enter contracts under its own name. Thereason is that it is conceded by the law that after a company has been registered, it acquires itsown legal identity. Consequently, in the eyes of law, a company is a separate entity, differentfrom its owners and controllers (shareholders and directors).As a result of the importance that is related with selecting the most appropriate subject forrunning the business, it is very significant that the business owners always go for the businessstructure that is most suitable for them. For example, Richard and his sons want to expand theirbusiness (Pentony et al., 2009). In order to make this decision, all the circumstances be to betaken care of. In the present case, the adjoining property of the neighbor has been busy isviolated in order to expand his business. Similarly, his sons, David and Liam have also decidedto join Richard. Under these circumstances, it can be concluded that Richard and his sons shouldopt for the registration of a company. This will also help them in raising the funds required forexpanding the production.
TLAW202 Corporations Law Assignment_3

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