MGL1112 Business and Legal Environment: Business Structures Essay

This essay analyzes the case scenario of Obama and Osaka, who are planning to start a business providing economical and healthy food in Australia. It explores different business structures suitable for their venture, considering their assets, loan requirements, and plans to attract investors. The essay recommends the company structure as the most appropriate option, detailing its advantages like investor attraction and limited liability. It further outlines the process of incorporating an Australian company, including registration requirements, the need for directors and a company secretary, and the associated costs. The essay also highlights the importance of obtaining necessary licenses for the food industry and provides relevant references to support its arguments. The assignment addresses key aspects of business structures, offering advice and recommendations for establishing a successful business.

2018
Business and Legal
Environment
Student’s Name

Business and Legal Environment 1
Contents
Answer 1..........................................................................................................................................2
Answer 2..........................................................................................................................................3
References........................................................................................................................................4

Business and Legal Environment 2
Answer 1
In the given scenario, two of the people named Osaka and Obama wants to start a
business of Economic and Healthy foods in Australia. Many business structures are available to
them that have certain positives and negatives attributes. First of all, discussing the facts, this is
to state that they have assets worth $150,000 and will take a loan of $200,000. Further assuming
the fact that they will provide quality services, they will earn $150,000 as their income in the
first twelve months. This income will cover up their start-up cost in the beginning. They are also
planning to attract investors for their business. In such a situation the option of business structure
that left with them is a company. They are advised to form a company. This business structure
will be suitable to them as it will execute all their potential plans.
The business has a high set up cost but the initial earning, as well as other investments,
would cover up the same. This is to state that they can call investors in the form of shareholders
and can also limit their rights. It is well known that in the case of a corporation, there is a
separation between ownership and management (Haghirian, 2016). These investors, being the
shareholder of the company will be the owners and Osaka and Obama will be the manager of the
business and would have significant control over the affairs of the company. In conjunction to
this, the tax rate is also low in cases of companies comparing other structures Because of its
investors; business would not face the issue of lack of capital and therefore these people are
advised to incorporate an Australian company.
Answer 2

Business and Legal Environment 3
As concluded in the above-mentioned part, a company will be the most suitable option
for them; here the process of incorporation of a company is detailed. Osaka and Obama are
required to register an Australian company by using form 201 which is available to its website
(Asic.gov.au, 2019). Further, in addition to this, the company would also require to ensure a
minimum number of director and the existence of the company secretary. If to talk about the
setup code involved in this business structure this is to state that a proprietary company can be
formed in $488 in Australia (Business.gov.au, 2018). They are required to submit this form to
the Australian Securities & Investments Commission after filling necessary details. Then after
this authority will register their company. On the event of registration, the company will receive
a unique identification number which is known as Australian Company Number. Once the
company is registered, these people would have to do other tasks. Another task should obtain the
necessary license. As given in the problem scenario, these people are going to business in the
food industry and therefore they will have to seek the license from the respective authority.

Business and Legal Environment 4
References
Asic.gov.au. (2019). Steps to register a company. Retrieved From: https://asic.gov.au/for-
business/registering-a-company/steps-to-register-a-company/
Business.gov.au. (2018). Retrieved From:
https://www.business.gov.au/change-and-growth/restructuring/sole-trader-to-a-
company/difference-between-a-sole-trader-and-a-company/what-are-the-set-up-steps-
and-costs
Haghirian, P. (2016). Routledge Handbook of Japanese Business and Management. Oxon:
Routledge.