Business and Legal Environment: Company Structure and Registration

This assignment delves into the optimal business structure for Ashley and Bentleigh, recommending a company structure due to its limited liability advantage. It outlines the benefits of this structure, including limited liability, separate legal entity status, perpetual existence, professional management, expansion potential, and transferability of shares. The assignment then details the company registration process under the Corporations Act 2001, emphasizing the importance of selecting a suitable company name, deciding on governance rules, and the three methods for registering a company: through the Australian Government’s Business Registration Service, a private sector provider, or directly with the Australian Securities and Investments Commission. The registration process culminates in the issuance of an ACN and a certificate of registration by ASIC. The document references key sources like the Corporations Act 2001 and various business resources from government websites.

Running head: BUSINESS AND LEGAL ENVIRONMENT
BUSINESS AND LEGAL ENVIRO NMENT
Name of Student
Name of University
Author Note

a) Business Structure
The business structure that would be suitable for Ashley and Bentleigh would be
Company structure as neither of them want to be personally liable for any debt incurred by the
business (Austin and Ramsay, 2015).
Advantages of Company
The advantages of a Company business structure are as follows:
 Limited Liability: The liabilities of the shareholders in a company are limited to the value
of the shares held by them.
 Separate Legal Entity: A company has a separate legal entity, that is, the existence of a
company is separate from its members. A company can be seen to own, enjoy or dispose
of any property in its own name (Hannigan, 2018).
 Perpetual Existence: A company has a perpetual existence. The death, insolvency or
insanity of any director or shareholder of a company would not be affecting the existence
of the company (Business.qld, 2019).
 Professional Management: In a company structure of business the directors, elected by
shareholders, are responsible for the management of the business. For the management of
the day-to-day activities salaried managers are appointed.
 Potential of Expansion: As a public limited company does not have any limit towards the
maximum number of shareholders, hence the business expansion is easily done by the
issue of new shares and debentures.

 Transferability of Shares: The transfer of the ownership of the shares to another party is
easily done (Business.tas, 2017).
 Risk Diffusion: As there are large number of members in a company the risk of the entire
business can be seen as divided among the members of the company.
b) Registration Process of Company
For registering a Company under the Corporations Act 2001 certain steps are needed to
be followed (Business, 2019). The first step is to decide if the company structure suits the needs
of the owner of the business. The next step is to be selecting the name of a company. For the
selection of the name of a company certain things are needed to be considered; there are certain
restricted terms like ‘royal’, ‘bank’, ‘incorporated’ and ‘trust’ that could potentially mislead
people about the activities of the company; a company can reserve a name for the company
before registering it; checking for existing names or trademarks and the liability of the members
of the company should be reflected in its name. The next step is to be deciding whether the
company would be governed by the replaceable rules, own constitution or by a combination of
both. The final step is to register the company. The registering of a company is done in three
ways. A company can be registered using the Australian Government’s Business Registration
Service (BRS). The second way a company can be registered is by way of a private sector
provider (PSP). The final way a company can be registered is directly lodging a paper form
directly with Australian Securities and Investments Commission. Once the application has been
processed the ASIC would provide the company with an ACN, register the company and send
them a certificate of registration (ASIC, 2019).

Reference
ASIC (2019). Steps to register a company | ASIC - Australian Securities and Investments
Commission. [online] Asic.gov.au. Available at:
https://asic.gov.au/for-business/registering-a-company/steps-to-register-a-company/
Austin, R.P. and Ramsay, I., 2015. Ford, Austin and Ramsay's Principles of Corporations
Law. FORD, AUSTIN AND RAMSAY'S PRINCIPLES OF CORPORATIONS LAW,
LexisNexis Butterworths, Australia,.
Australian Securities and Investments Commission
Business (2019). Register your company. [online] Business.gov.au. Available at:
https://www.business.gov.au/registrations/register-your-company
Business.qld (2019). Company business structure | Business Queensland. [online]
Business.qld.gov.au. Available at:
https://www.business.qld.gov.au/starting-business/types-legal-structures/legal-
structures/company
Business.tas (2017). Company - advantages and disadvantages - Business Tasmania. [online]
Business.tas.gov.au. Available at:
https://www.business.tas.gov.au/starting-a-business/choosing-a-business-structure-intro/
proprietary-company-advantages-and-disadvantages
Corporations Act 2001
Hannigan, B., 2018. Company law. Oxford University Press, USA.