Analysis of Australian Business Structures: Sole Trader to Trust

This report provides a detailed analysis of the four primary business structures in Australia: sole trader, company, partnership, and trust. It begins by defining a sole proprietorship, highlighting its simplicity, the owner's liability, and the direct link between the owner and the business's profits and liabilities. Next, the report describes a company as a separate legal entity, emphasizing the role of directors, shareholders, and the company's compliance with Australian law. Following this, the report explores partnerships, outlining the shared ownership, division of assets and liabilities, and the importance of partnership agreements. Finally, it defines trusts, explaining the role of trustees, the protection of assets, and the structure's operation through trust deeds. Each structure is discussed in terms of its key characteristics, legal framework, and implications for business owners. The report references academic sources to support the analysis and provides a clear understanding of each business structure.

BUSINESS STRUCTURES IN AUSTRALIA

Briefly explain each of the four most common types of business structures in
Australia
Sole trader
Business which is maintained and operated by a single owner is called sole proprietorship
business. The management of the sole trading business keeps in account limited profit and high
risk entity. The business structure is single handed operation with lesser needs of accounting
statement. It can be operated with simple income expense statement. In this business type all the
asset of the firm belongs to the sole trader whereas the all the liabilities associated with the
business is also beard by the sole trader. In this business type profit which has been earned by the
firm is totally of the owner and the owner can employee staffs to operate on behalf of the sole
trader. It can be said that there one individual or sole trader which looks after all the operations
which conducted by a company (Epifanova et al. 2015).
Company
A company is a business structure which is considered as a separate legal entity from the ones
which has set up the business conducted by the company. Company is treated as artificial person
who represent the business activities of the firm. Now people which are direction of the company
are the legal representative of the company as company is a legal entity a hence the all the
positive and negative activities. The company works in benefit of its shareholders and
stakeholders in an evident manner (Prause, 2015). A company is operated and better managed
with the company law of Australia which is amended every financial year for better development
of companies.
Partnership

A partnership business is a business structure in which there is more than one proprietor who is
the owners of the firm. The Australian government marks it as a reliable format of business with
sufficient consent from every partner. It can be said that the asset of the company is divide
between the numbers of partners whereas all the liabilities is also divided between the partners of
the firm. Partnership agreement is signed between the partners on the basis of which partnership
business in conducted. In this agreement all the terms and condition or partnership is maintained
based on which partnership is maintained. Profit that is earned by the operational activities of the
firm is distributed among the partner and partner are responsible representative which directly
represent the firm's operations (Roberts, 2018). Partnership is operated as per the Memorandum
of deed.
Trust
Trust is a business structure in which trustees carry out the business on the behalf of the
members of the trust or the beneficiaries. It is to be mentioned that trust is not considered as
separate legal entity but are the representative of the beneficiary for running the firm. The trust
operations or business structure of trust is done and maintained through trust deed. Under trust
the asset of the firm are protected and the liabilities of the company is reduced in a
comprehensive manner. In case of any disruption the trustee can be dissolved and formed into a
new operational business structure of the firm. (Mackie, 2018)

References
Epifanova, T., Romanenko, N., Mosienko, T., Skvortsova, T. and Kupchinsky, A., 2015.
Modernization of institutional environment of entrepreneurship in Russia for development of
innovation initiative in small business structures. European Research Studies, 18(3), p.137.
Mackie, J., 2018. Business success among Southeast Asian Chinese: the role of culture, values,
and social structures. In Market Cultures (pp. 129-144). Routledge.
Prause, G., 2015. Sustainable business models and structures for Industry 4.0. Journal of
Security & Sustainability Issues, 5(2).
Roberts, J., 2018. Multinational business service firms: development of multinational
organization structures in the UK business service sector. Routledge.