Starting a Business: Legal and Financial Considerations

Management
Business and legal environment

MANAGEMENT 1
Question 1
In the given case study, Obama and Osaka are planning to start a business together of
“Economic and Healthy foods” in Australia. Some of the facts in relation to the said planning
are noteworthy and are listed as follows. Firstly, both Obama and Osaka have adequate funds
for the said start-up in form of assets of $150,000 and planned loan of $200,000. Further, to
note, the future projected future cash flows in the form of earnings $ 150,000 is adequate to
cover the start-up costs. In addition, there is no limit on inclusion of outside investors in the
enterprise as owners are planning to welcome investors in their business structure.
Accordingly, Obama and Osaka are suggested to form a company as the most suitable
business structure for the said business in Australia. This is because, the company formation
has a high start-up costs and fees, but the allocated initial capital and projected earnings
would be able to cover the same (Legal Vision Pty Ltd, 2018). Further, as Obama and Osaka
are planning to include the investor, they can limit their liability by welcoming the said
investors in the form of shareholders, thereby attracting large capital base and reduction of
overall liability to unpaid amount on share capital. Further to add, the tax rate for companies
is less than the other form of business structures in Australia (Queensland Government,
2019). This is also a positive point to consider.
Question 2
The process of registering the business and other legal requirements of the business
are explained as follows. The owners will have to register the company with the Australian
Securities & Investments Commission (ASIC) by the payment of the requisite registration
fees. Upon registration, the company will be granted a 9 digit Australian Company Number
which is required to be mentioned by the company on all of its important documents such as
the invoices, business letterheads, official company notices, other documents to be lodged
with ASIC and likewise (Department of Industry, Innovation and Science, 2019). Further, the
business is required to obtain an Australian Business Number and obtain a trademark
registration. Further, the company will have to obtain appropriate licenses and permits in
relation to foods industry business. One of the chief licenses that are necessarily need to be
obtained is Food Business License of the respective state as mandated by the Australian
Business Licence and Information Service. In addition, the company would be required to
abide by the Food Health and Safety Regulations, Food Safety Supervision and others, which
regulates the food business. Further, it is mandatory to provide the basic training to