LAW205 Corporate and Commercial Law Assignment: Business Structures

This assignment solution addresses a business law problem faced by Bill and Mary, who seek to establish a property management business. The solution analyzes various business structures, including sole proprietorships and companies, offering guidance on registration processes and the inclusion of co-owners. The assignment explores the features of a company structure, the process of registering a company, and the advantages and disadvantages of operating as a company compared to other structures like partnerships and sole traders. Furthermore, the solution provides recommendations on safeguarding personal assets, such as through dual company structures and professional indemnity insurance. The analysis also covers the statutory and reporting obligations of companies, including updating ASIC, maintaining financial records, and complying with tax regulations. The assignment incorporates references to relevant legal and business literature.

Running head: BUSINESS LAW
BUSINESS LAW
Name of the student
Name of the university
Author note

1BUSINESS LAW
Answer to question 1
Bill can undertake business, and there are several steps involves in the registration of
business. One of the crucial steps for initiating the business is the registration of business.
Fundamentally the business is made registered with the state where the business will works.
Registration of business with the stare organization assists in initiating and operate the business
legally. Secondly, choosing the structure of the business that has to be decided prior to the
registration of the business (Foerster et al. 2017). The choices that are available are a
corporation, sole proprietorship, Limited Liability Company, or partnership. In order to make
registration of any category of business, there is a requirement to choose the name of the
business. Most Texas states involved do not permit two businesses to functioned in the state with
having a similar name. Thus due to this, it would be wise to select backup names if the situation
arises that first selection had already been applied by someone (Davies 2020) In case of
registration of the corporation, it is necessary for the name of the business to carry one of the
designations that are corporation, incorporated, Inc, Corp, Co, company—then obtaining a
business license and the license rest on the category of business. Mary is the wife of Bill, and he
can be included Mary as the co-owner of the business. The ownership interest of the co-owners
in the business organization is acquired by the personal ownership of the stock certificates that
are issued by the corporation. The personal obligation of the co-owner is restricted to the value
of types and the number of the stock certificate owned.

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Another to question 2
The features of the company structure include the following. Firstly it is the artificial
person that is established by the law. Secondly, the company has a separate legal entity that is
distinct from the shareholder or the members of the company. Thirdly the company is a legal
entity that has a common seal on which the name of the company is engraved. Fourthly the
company has perpetual existence that implies that unlike a partnership, the corporation is not
hampered by lunacy—death, retirement, or insolvency of the directors or members. Fifthly the
company has a limited liability that is the obligation of the member of the corporation is
restricted normally to the quantum of shares guarantee or held by them ( Hannigan 2018).
Furthermore, the other features involve the distinction of ownership from that of management,
share transferability. The company complied with all the responsibilities under the Corporation
Act, 2001. That implies that operations of the business are managed by the directors as well as
owned by the shareholders. The capital earned by the business belongs to the company. The
directors are obliged to complete the annual review as well as make payment of an annual fee.
The procedure of registration of the company involves login firstly to ASIC and register
the name of business under the License and Registration tab and then enter the Australian
business number. After that entering the proposed business name and also need to select the
period of registration ten, it is required to enter the name and details of the business holder after
that entry of business address. After that, confirm the entitlement to hold the particular business
name. Therefore for this, the holder cannot engage in any sort of illegal offenses, and the same is
outlined in Business Name Registration Act, 2011. Mary can become a co-owner of the
company. Bill will initially start the business with the assistance of his wife. He asks his friend

3BUSINESS LAW
Steve Steve to join the business an who can bring additional capital for the business. Thus Bill
can arrange Steve or other associates to join the business.
Another to question 3
There are various pros and cons of operating a business as a company in comparison to
another form of business structure as a partnership or sole trader. One of the primary advantages
of carrying out business as a corporation is that personal assets are safeguarded from any damage
that is incurred by commerce—secondly, flexibility for tax planning (McBarnet 2019). Thirdly
the company structure of business has the capability to bring about additional shareholders in
addition to that raise capital. Fourthly the income can be a divide between the owners of the
family for the purpose of tax. The Corporation Act formulates on the method the corporation
takes decisions. From the perspective of capital raising and investment, the company can
persuade investment in the company by proposing shares in the corporation to third parties. The
company made payment of tax at the corporate rate that is 30%. The company has an exclusive
characteristic of perpetual succession. That is, the corporation is the separate legal entity in
addition to that death of members as well as directors. The disadvantage of the company
structure of the business is it engages more cost as well as time-consuming to create. Secondly,
the additional fees for accounting each year. Thirdly the company can be expensive at the time of
winding up the business. Thirdly the reporting requirements may be complicated in the company.
Fourthly the financial affair gets public. Fifthly in case, the directors of the corporation drop to
fulfill the obligations, then they might be held liable personally for the debt of the company.

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Another to question 4
In the instant case, Bill desire to establish a personal management business named Bill’s
Property Management Services. Bill and his wife Mary want to safeguard their personal assets in
case of failure of the business. There are several methods to safeguard the personal assets of the
business. Firstly dual structure of the company. The dual structure of the company complements
extra layer as in most of the situation, the holding corporation generally has possession of major
assets of the business such as intellectual property as well as excess cash (Hashan et al. 2016).
Although the added safeguard of the limited liability in case of incorporating corporation, the
court in special circumstances disregard the separation by “piercing the corporate veil” holding
that the directors are held to be personally liable. Furthermore, adopting and maintaining the
professional policy of indemnity insurance. I addition to that, there are several other business
structures that provide protection of the personal assets of the owners. The limited liability
partnership is the best option for business. The LLP invites flexibility, simplicity as well as the
limited personal obligation from the creditors of the business. The owners have limited liability
in consideration of the debts of the business. Thus the business interest of owners of LLC is
safeguarded from assertions of owners’ personal creditors. Therefore LLC provides significantly
enhanced safeguards from the assertions of the personal creditor of owners of the business.
Another to question 5
The company, as a business structure, is a distinct legal entity in comparison to the
partnership or sole trade structure. That implies that the corporation has similar entitlements as

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the natural individual in addition to that can sustain debt, sue or sued. The directors of the
corporation, as well as the company itself, have several chief statutory and reporting obligations
that require to be complied with. Some of the mutual obligations involve update ASIC within the
period of 28 days of the key development to the details of the company (Petrovskaya et al. 2016).
Secondly, maintaining financial records. Thirdly comply and understand all the obligations as the
director of the company. The company is required to register for goods and services tax if the
turnover is $ 75,000 or more than that. In the case of the sole trader, the reporting obligation is to
comply with superannuation contributions and workers’ compensation schemes. Trust is an
obligation that is imposed on the individual to hold assets or property for the advantage of others.
In case of operation of the trust, the trustee is statutorily accountable for the operations.

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References
Davies, P., 2020. Introduction to company law. Oxford University Press.
Foerster, A., Peel, J., Osofsky, H.M. and McDonnell, B., 2017. Keeping good company in the
transition to a low carbon economy? An evaluation of climate risk disclosure practices in
Australia. An Evaluation of Climate Risk Disclosure Practices in Australia (May 12, 2017), 1.
Hannigan, B., 2018. Company law. Oxford University Press, USA.
Hashan, H., Aljuffali, I., Patel, P. and Walker, S., 2016. The Saudi Arabia Food and Drug
Authority: an evaluation of the registration process and good review practices in Saudi Arabia in
comparison with Australia, Canada and Singapore. Pharmaceutical medicine, 30(1), pp.37-47.
McBarnet, D., 2019. When compliance is not the solution but the problem: From changes in law
to changes in attitude. Centre for Tax System Integrity (CTSI), Research School of Social
Sciences, The Australian National University.
Petrovskaya, M.V., Zaitseva, N.A., Bondarchuk, N.V., Grigorieva, E.M. and Vasilieva, L.S.,
2016. Scientific methodological basis of the risk management implementation for companies’
capital structure optimization. International Electronic Journal of Mathematics Education, 11(7),
pp.2571-2580.