Business Law: Legal and Financial Obligations Comparison Report

This report examines the legal and financial obligations associated with different business structures, specifically focusing on partnerships and family businesses within the context of the construction industry. It outlines the requirements for business registration in Australia, including the steps involved in choosing a business structure, applying for an Australian Business Number (ABN), selecting and registering a business name, and registering for relevant taxes such as GST, TFN, and PAYG withholding. The report also details the procedure for businesses to register as builders, emphasizing the need for a building contractor license and potentially a high-risk work license. Furthermore, it contrasts the trading situations of a partnership and a family business, highlighting the legal and financial implications for each structure, including liability, management responsibilities, and the separation of business and personal assets. The report concludes by comparing the operational differences between a partnership and a family business, discussing the advantages and disadvantages of each approach in terms of liability, setup costs, and ongoing obligations.

Running head: BUSINESS LAW
BUSINESS LAW
Name of Student
Name of University
Author Note

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Requirements for registration as a business
For the setting up of a business in Australia a person has to register the business. There
are a certain steps for the registration of a business (Hillary, 2017). The first step is to decide the
structure of the business for its mode of operations. The types of business structures are: sole
traders, partnerships, company and trust. The structure of business however can be changed with
the growth of the business. The next step is to apply for the Australian Business Number. An
Australian Business Number is a unique number for allowing the identification of a business to
the government and the other businesses. The third step is finding a suitable business name under
which the business would be operating. Whether the selected name is available or not can be
found in the website of the ‘Australian Securities and Investments Commission’ (ASIC). The
final step in the process is to register the selected business name. The registration process is done
with the ‘Business Registration Service’. Along with the registration for the ABN number and
the name of the business there are various taxes that a business needs to register for. The taxes
the business needs to register for are: goods and services tax (GST), tax file number (TFN) and
pay as you go (PAYG) withholding (Jeston, 2014).
Procedure of businesses to register as a builder
For a business to be working as a builder in Australia it is required for the business to be
registering. For registering as a builder any individual or business needs to get a building
contractor license which also includes a subcontractor license if the business is seen to be
carrying out or organizing building work for others or for selling or letting buildings or lands. To
get approval of a license or a registration a combination of experience, knowledge, skills and

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technical qualification might be required. One of the steps in the process for the registration of
business license can be said to be completing the training that has been approved by the licensing
body of the state the business is operative in. As a builder the businesses would need to be
applying for licenses that are related to construction. The first license that is required is an
individual contractor’s license that is necessary for carrying out any type of commercial or
residential building work. Another license that is necessary is a high-risk work license if there is
a chance of operating heavy machineries like the cranes or forklifts (Steinhardt and Manley,
2016).
Difference of trading situation between partnership and family business
Two types of partnerships are generally present under the Partnership Act 1958. These
are: general partnerships and limited partnerships. In general partnership the responsibility for
the management of the business falls equally on all the partners and all the partners have
unlimited liabilities towards the debts and obligations that are incurred by the business. In a
general partnership transfer of interest is not possible without the consent of the other partners. In
a limited partnership business there are one or more general partners present along with one or
more partners with limited liabilities. Limited partnerships are seen to be attracting investors
because there is limited liability towards the debts of the business. A family business in Australia
is seen to be beneficial to both the local and global economies. In the family business structure
there is a long term outlook with them hitting their goals for years and sometimes even for
decades ahead (Gilding, Gregory and Cosson, 2015). As the finances are mostly contributed by
the family members who are working in the business, this leads to capital contribution and pay
cuts which in turn results inn decreased costs.

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Difference in Business Operations
In the partnership business run by my friend and his wife both him and his wife are
personally held liable for any debt that the business is seen to be incurring. A partnership
business is not a separate legal entity and is treated same as its partners. Both my friend and his
wife would be jointly and severally be liable for each others’ debts. However a partnership is
seen to be having low cost set up and minimal costs that are ongoing. As partners in a
partnership business they are seen to owe fiduciary duties towards each other (Wood and
Logsdon, 2017).
In the family business organization that is operated by me and my wife both can be the
shareholders and directors of the business. Thee set up cost is relatively higher for this type of
business. The business needs to be reviewed annually by the ASIC. A family business
organization operated as a company is a separate legal entity from its owners. The assets of the
business would be treated separately from the assets that me and my wife own. As the directors
and shareholders of the business we would owe the director’s duties to the company.

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Reference
Australian Securities and Investments Commission (ASIC)
Cohen, E., 2017. CSR for HR: A necessary partnership for advancing responsible business
practices. Routledge.
Gilding, M., Gregory, S. and Cosson, B., 2015. Motives and outcomes in family business
succession planning. Entrepreneurship Theory and Practice, 39(2), pp.299-312.
Hillary, R., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Jeston, J., 2014. Business process management: practical guidelines to successful
implementations. Routledge.
Partnership Act 1958
Steinhardt, D.A. and Manley, K., 2016. Exploring the beliefs of Australian prefabricated house
builders. Construction Economics and Building, 16(2), pp.27-41.
Wood, D.J. and Logsdon, J.M., 2017. Theorising business citizenship. In Perspectives on
corporate citizenship (pp. 83-103). Routledge.