LAWS20059 Fiduciary duty under partnership and corporation structure Case Study 2022

LAWS20059
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Contents
“Set up cost, administrative and regulatory burden”......................................2
“Liability of business and its participants to third parties”..............................4
“Fiduciary duty under partnership and corporation structure”........................6
Recommendation.............................................................................................8
Bibliography...................................................................................................10
Case laws....................................................................................................10
Legislation...................................................................................................10
Books/Journals............................................................................................10
Other Resources.........................................................................................10

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“Set up cost, administrative and regulatory burden”
Business owners have to pay some cost while setting up the business as well
as for its administration. In addition to this, some regulatory requirements
and burdens also exist in the case of each business. The setup cost and
administrative requirements of business under partnership business
structure and corporation structure are discussed further.
Partnership structure
To set up a business as a partnership firm, owners of the business (partners
of the firm) need to fulfill very few legal requirements and to spend minimal
money. The formation of a partnership firm firstly demands an Australian
business number that can be applied using e-portal as well. The registration
of ABN does not need any fee to pay1. ABN is a business registration
number and is a mandatory requirement. A business under this structure
may carry on an individual’s name in such a circumstance there is no need
to register the business name. Nevertheless, if a different name is there
which a firm needs to get registered then it has to pay certain charges for
the same. Australian Securities and Investments Commission (ASIC)
manage such registrations. The cost for one-year registration is $36 and for
three years is $842. Apart from this, the businesses may seek trademark
1 abr.business.gov.au,
ABN basics FAQs (Australian Government) <
https://abr.business.gov.au/FAQ/ABNBasics>.
2 savvysme.com.au, ABN,
ACN and Business Name: What’s the Difference? (Savvy sme) <
https://www.savvysme.com.au/article/7454-abn-acn-and-business-name-whats-the-
difference>.

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registration as well if provide goods or services are being provided under a
specific name or a brand name that needs to be registered as unique
content. Further, a partnership agreement creation is another legal
formality that needs to be done to bring a firm into existence. The oral
partnership agreement does not attract any cost but in case of a written
contract, partners have to make expenditure over legal charges. In addition
to this, no other expenditure is there in the case of partnership firm
formation. Further, all the partners are liable to administer the business of
the firm. However, partners may decide mutually and as a result, one or
more partners can administer the firm on behalf of others. No other
regulatory burden is there on partnership firms. Except for tax-related
returns, no other return or details are required to be filed to the authorities.
The ongoing requirement includes renewal of business name at its expiry
and the charges are the same as $36 and $84 as discussed above.
Corporation structure
Some setup costs and requirements are the same as a partnership. Under
company structure too, businesses need to have a free of cost business
registration number. A second similar requirement is registration of
business name with ASIC, where for the registration of 1 year, the promoter
needs to pay $30. If they want to get the business name registered for 3
years then charges are $84. If the promoter wants they can register a
trademark in the context of their good and services. These cost and set up
requirements were also there in the case of a partnership. Now to set up a