3Letter of AdviceTo PeterXYZSubject: Appropriate Business Structure for his businessHello,Solution 3As per the facts stated by Peter and Susan, Peter is interested in setting up a propertymanagement business (PPM Services) by himself with the help of Susan. He is also interested inseeking help of his friend, Jack, who will bring in additional capital and business skills to expandthe business. The main concern of Susan prior establishing the business is that she intends toprotect their house for their young family as she is skeptical that there are chances that the familyhouse is lost when the business fails.Concerning the facts that are provided, it is submitted that in Australia, there are three kinds ofbusiness that are mostly opted by people to establish their business. The first is a sole trade shipwherein only one person is the owner and who manages the business. Since, Peter intends toestablish business with Susan, thus, Sole trader ship is not the right choice. (ClaytonUTZ, 2017)Another business structure is partnership, wherein two people carry on business of continuousnature with the aim to earn profit and is analyzed in Smith v Anderson (1880) (Sydney, 2017)Further, a business can also be run by way of a company which is an entity registered as per therequirements of the Corporation Act 2001. Salomon v Salomon & Co [1897] is the leading casewhich established the main elements of a company. (Ramsay & Noakes, 2001)Considering the facts, it is advice that Peter and Susan must carry on their business by way of acompany. The main advantages of operating a business as a company rather than a sole trader orpartnership are that, firstly, that it has limited liability which implies that the liabilities of themembers is limited to the extent of their shareholding. No personal assets of the members are atrisk even when the company is not able to meet its financial burdens (Lee v Lee's Air Farming

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