This article provides a brief explanation of the four most common types of business structures in Australia: sole trader, company, partnership, and trust. It discusses the characteristics, ownership, liabilities, and operations of each structure.
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BUSINESS STRUCTURES IN AUSTRALIA
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Briefly explain each of the four most common types of business structures in Australia Sole trader Business which is maintained and operated by a single owner is called sole proprietorship business. The management of the sole trading business keeps in account limited profit and high risk entity. The business structure is single handed operation with lesser needs of accounting statement. It can be operated with simple income expense statement. In this business type all the asset of the firm belongs to the sole trader whereas the all the liabilities associated with the business is also beard by the sole trader. In this business type profit which has been earned by the firm is totally of the owner and the owner can employee staffs to operate on behalf of the sole trader. It can be said that there one individual or sole trader which looks after all the operations which conducted by a company (Epifanovaet al.2015). Company A company is a business structure which is considered as a separate legal entity from the ones which has set up the business conducted by the company. Company is treated as artificial person who represent the business activities of the firm. Now people which are direction of the company are the legal representative of the company as company is a legal entity a hence the all the positiveandnegativeactivities.Thecompanyworksinbenefitofitsshareholdersand stakeholders in an evident manner (Prause, 2015). A company is operated and better managed with the company law of Australia which is amended every financial year for better development of companies. Partnership
A partnership business is a business structure in which there is more than one proprietor who is the owners of the firm. The Australian government marks it as a reliable format of business with sufficient consent from every partner. It can be said that the asset of the company is divide between the numbers of partners whereas all the liabilities is also divided between the partners of the firm. Partnership agreement is signed between the partners on the basis of which partnership business in conducted. In this agreement all the terms and condition or partnership is maintained based on which partnership is maintained. Profit that is earned by the operational activities of the firm is distributed among the partner and partner are responsible representative which directly represent the firm's operations (Roberts, 2018). Partnership is operated as per the Memorandum of deed. Trust Trust is a business structure in which trustees carry out the business on the behalf of the members of the trust or the beneficiaries.It is to be mentioned that trust is not considered as separate legal entity but are the representative of the beneficiary for running the firm. The trust operations or business structure of trust is done and maintained through trust deed. Under trust theassetofthefirmareprotectedandtheliabilitiesofthecompanyisreducedina comprehensive manner. In case of any disruption the trustee can be dissolved and formed into a new operational business structure of the firm. (Mackie, 2018)
References Epifanova, T., Romanenko, N., Mosienko, T., Skvortsova, T. and Kupchinsky, A., 2015. Modernization of institutional environment of entrepreneurship in Russia for development of innovation initiative in small business structures.European Research Studies,18(3), p.137. Mackie, J., 2018. Business success among Southeast Asian Chinese: the role of culture, values, and social structures. InMarket Cultures(pp. 129-144). Routledge. Prause, G., 2015. Sustainable business models and structures for Industry 4.0.Journal of Security & Sustainability Issues,5(2). Roberts,J.,2018.Multinationalbusinessservicefirms:developmentofmultinational organization structures in the UK business service sector. Routledge.