Steps to Incorporate a Company and Pros and Cons of Operating as a Company

Running head: CASE STUDY ASSIGNMENT
CASE STUDY ASSIGNMENT
Name of the Student
Name of the University
Author Note

1CASE STUDY ASSIGNMENT
Table of Contents
Question No 1............................................................................................................................2
Issue........................................................................................................................................2
Rules:......................................................................................................................................2
Application:............................................................................................................................4
Conclusion:............................................................................................................................5
Question No 2:...........................................................................................................................5
Issues:.....................................................................................................................................5
Rules.......................................................................................................................................5
Application:............................................................................................................................6
Conclusion:............................................................................................................................7
Question No 3:...........................................................................................................................7
Issue:......................................................................................................................................7
Rule:.......................................................................................................................................7
Application:............................................................................................................................8
Conclusion:............................................................................................................................8
References:.................................................................................................................................9

2CASE STUDY ASSIGNMENT
Answer 1
Issue:
The issues to be discussed in this case study are firstly, the steps required to be taken
to incorporate a company and secondly, pros and cons of a operating a business as a
company. In this respect, Michael and his sons are to be advised.
Rules:
The most distinguishing factor between a company and a sole trading business is the
separate legal entity of the company from its members. A company can be regarded as a legal
entity which is distinct from it members. In order to convert a sole trading business to a
company, the following points are to be considered.
 Set up steps and set up costs
 Payment of tax
 Volume of paper work and other costs
 Assessment of business income
 Liability of business debts
 Control over business
The company structure for a business is mainly provided under the Corporations Act
2001(Cth). The set up steps of the company are comparatively complex as compared to sole
trading business. It has to be registered with Australian Securities and Investments
Commission (ASIC) using Form 201. An application for registration shall be made as per
section 117 of the Act. It will be under strict control and supervision of the ASIC. Section
1.5.3 enumerates the provisions of setting of a company. On the other hand, sole trading
business involves less complication as registration of company is not mandatory. Moreover,
sole trading business can be run by using personal name only whereas in company, separate