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Corporations and Business Structures

Marks: 40% of the overall assessment for the course. Submission: Online via Moodle. Format: One file in doc or docx (MS Word) format. Submissions in any other file format (e.g. zip) will be treated as a non-submission. Word limit: Word limits are set out below for each part. Referencing: Referencing should be in accordance with the Australian Guide to Legal Citation (AGLC), which is linked on the Moodle site. References should be by footnote, NOT end notes or reference lists or bibliographies. References to Acts should include section numbers. References are only necessary in Parts A, B and C. Extensions policy The university policy on extensions of time will be strictly enforced. Extensions will only be considered if made via the online system and must be based on medical or compassionate grounds. Any extension application should be made before the due date for submission. Medical conditions should be supported by a medical certificate, and, since students are expected to start the assignment early, temporary or last-minute conditions are usually not grounds for an extension. Professionals are expected to manage their time to meet

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Added on  2023-01-23

About This Document

This document provides an overview of the common business structures in Australia - sole trader, partnership, and company. It discusses their advantages, disadvantages, and legal obligations. The document also explores the liability of partners and individuals in contractual relationships and the duties of partners and directors in managing the operations of a business.

Corporations and Business Structures

Marks: 40% of the overall assessment for the course. Submission: Online via Moodle. Format: One file in doc or docx (MS Word) format. Submissions in any other file format (e.g. zip) will be treated as a non-submission. Word limit: Word limits are set out below for each part. Referencing: Referencing should be in accordance with the Australian Guide to Legal Citation (AGLC), which is linked on the Moodle site. References should be by footnote, NOT end notes or reference lists or bibliographies. References to Acts should include section numbers. References are only necessary in Parts A, B and C. Extensions policy The university policy on extensions of time will be strictly enforced. Extensions will only be considered if made via the online system and must be based on medical or compassionate grounds. Any extension application should be made before the due date for submission. Medical conditions should be supported by a medical certificate, and, since students are expected to start the assignment early, temporary or last-minute conditions are usually not grounds for an extension. Professionals are expected to manage their time to meet

   Added on 2023-01-23

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Corporations and Business Structures
Corporations and Business Structures_1
1
PART A
Sole trader, partnership and company are common business structures available in
Australia which can be selected by parties when they start their business operations. In
case a person did not want to deal with significant registration costs and legal
compliances, then he/she can select a sole trader business structure. The sole trader has
to apply for an Australian Business Number (ABN) to start the operations.1 The sole
trader has unlimited liability in the business, and the profit of the business is considered
as his/her personal income. The registration cost is low, and legal compliance is low as
well.
In a partnership business, two or more parties come together to start a business which
did not have a separate entity. The liability of the partners is unlimited, and they are
responsible for the actions of other partners. The registration cost is low, and partners
did not have to comply with strict legal provisions while conducting their business. In
Australia, states have their separate statutes to govern partnership; for example, in
Queensland, the Partnership Act 18912 (‘PA’) provides regulations regarding
partnerships. Section 5 provides its definition as a structure in which two or more
people come together to manage the business operations with a view of profits, and
they have unlimited liability in the business. They owe a fiduciary duty towards each
other, and they can be held jointly or severally liable for debts of the company.
People can also start a propriety company to manage their business in Australia which
has a separate entity from its owners. The Corporations Act 2001 (Cth)3 provides
provision regarding the incorporation of a proprietary company in which the legal
compliances are relatively higher than compared to a sole trader and partnership. The
company can form contractual relationships, and it can file a lawsuit against third
parties, and it can also be sued. Directors are responsible for handling the operations of
a company; however, they cannot be held personally liable for their decisions. The cost
1 ABR, Sole Trader (2018) <https://abr.gov.au/For-Business,-Super-funds---Charities/Applying-for-an-
ABN/ABN-entitlement/Sole-trader/>.
2 Partnership Act 1891
3 Corporations Act 2001 (Cth)
Corporations and Business Structures_2
2
of incorporation is $488, and it has to comply with different legal provisions while
managing its operations.4
4 ASIC, 201 Application for registration as an Australian company (2018) < https://asic.gov.au/regulatory-
resources/forms/forms-folder/201-application-for-registration-as-an-australian-company/ >.
Corporations and Business Structures_3

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