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News Agency Business - Assignment PDF

   

Added on  2021-05-31

9 Pages2649 Words56 Views
1ContentsContents......................................................................................................................................................1Topic 1........................................................................................................................................................2Topic 2........................................................................................................................................................4Topic 3........................................................................................................................................................6

2Topic 1Bibek has a news agency business in Australia. With passage of time his customer base isincreasing. The income of Bibek is increasing along with his tax. But, Bibek nowwants to expand his business. One of the best customers of Bibek, Bimanasubmitted that he must incorporate his business as sole trader.It is thus important to advice on the best business structure that Bibek must comply with. A sole trade is one of the business structures that are adopted by an individual. In sole trading theowner is the boss of the business and can keep all the profits of the company. Thestartup cost is very low and there is maintenance of confidentiality. (ASIC, 2018)However, there are several disadvantages that can also be attributed to a sole trader ship, that is,the liability of the owner is unlimited and is accountable for all the debts of thebusiness. He is not able to raise much capital if intend to expand the business. Theowner is taxed as single person which is very high. The responsibilities are toomuch to handle. (Justin & Bishop, 2006)It is submitted that Bibek is already managing the business independently and without theinvolvement of any other person and thus facing taxes problems. Since he intendsto expand his business which requires capital, expert personnel and limitation inliability then it is advisable that he must initiate his business by way of acompany. In Australia, to operate by way of company it is necessary that the same must be incorporated asper the provisions of the Corporation Act 2001. There are several steps that arerequired for the formation of the company. The same includes: (Mills & Woodford,2015)i.It is very important to decide whether the company is the right choice foroperating as a business. Once a company is established, it has several advantages that can be attributed, which includes:

3a.Separate legal entity of the company which emphasize that a company is distinct from itsmembers and the acts of the company are of its own and not of the companymembers and is rightly held in (Salomon v A Salomon and Co Ltd , 1897);b.The corporate taxes are applicable on the company and thus tax advantages can be gainedif a company is incorporated;c.The liability is limited to the extent of the shareholding value of the members and thustheir personal assets are not attached to satisfy the dents of the company and isheld in (Briggs v James Hardie & Co Pty Ltd);d.It is very easy to transfer the shares of one company to another;e.It is very easy to trade anywhere in Australia;ii.Once it is decided that a company needs to be formed, then, the next step is todecide the name of the company. It is necessary that the name that is selectedmust not be existing or identical with an already existing name. However, thereare few words that cannot be used without the permission of the governmentminster, that is, trust, bank, royal, incorporated. Offensive words are also notregistrable. A name can also be reserved in Form 410. iii.It is then necessary to decide as how a company will operate. A company canoperate by way of replaceable rules or by the constitution of the company or byboth. iv.It is necessary that the officeholder obligations must be understood. Theobligations includes:a.That the company details must be upto date;b.The records and register of the company must be maintained;c.The lodgment and annual review fees must be paid.v.It is then necessary to seek the consent of the members, officeholders andoccupiers. The written consent is required from the following people.a.A director must be 18 years of age;b.A secretary must be 18 years of age;c.Member consent required and every company must have minimum one membervi.When all the requirements are met then the company must be registered. Theregistration of the company can be done in two manner:

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