Business Structures, Contract Law & Legal Obligations in Australia

This report provides an overview of Australian Corporation Law, focusing on business structures and contract law. It identifies five common business structures: Sole Trader, Partnership, Company, Trust, and Joint Ventures, recommending a partnership for the cousins due to its advantages in combining skills, sharing costs, and collaborative decision-making. The report also analyzes a contract law scenario, discussing Yutaka's authority as an executive director and Intoku Pty Ltd's legal obligations, concluding that Yutaka's actions for personal benefit may not bind the company. The report emphasizes the importance of fulfilling legal obligations within the Australian business and contract law framework. Desklib provides more solved assignments for students.

AUSTRALIA-
CORPORATION LAW

Table of Contents
INTRODUCTION ..........................................................................................................................2
TASK ..............................................................................................................................................2
Question 1:..................................................................................................................................2
Question 2:..................................................................................................................................3
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................4

INTRODUCTION
Corporation law of Australia is governed under the Corporations Act 2001 wherein a
corporation is a type of separate legal entity. Australia's business law provides legal framework
for the running of a business(Beatty, Samuelson and Abril, 2021). Thus this report will cover
about types of business structures and recommendations on the suitable type, it shall also cover
contract law and legal obligations in it.
TASK
Question 1:
The five commonly followed business structures in Australia are Sole Trader,
Partnership, Company, trust and joint ventures.
Sole Trader is the most simplest form of business structure which is easier to set up. The
person is the sole decision maker and all the profits earned are in his name. Full control of the
business is under him and it makes a person personally liable (Eldridge, 2019).
Partnership has two or a group of people with common business goals. It has an
agreement which lays down the rights and responsibilities of the partners. It is legally governed
by the Partnership act. The partners share the control and management of business.
Company is the most common type and are a type of separate legal entities. Companies
in Australia are registered under the Australian Investments and Securities Commission.
Companies are expensive to be set up and the money that the business makes is in the name of a
company.
Trust is a place where third parties are allowed to hold a property or income. They can
be expensive to create (Halberda, 2020). Here a trustee carries out the business on behalf of its
members.
Joint Ventures is an agreement between parties wherein towards a specific task the
parties come and work together. It can be of any size and is a type of impermanent grouping
which can help a business to grow.
The most suitable business structure for them is partnership. It has an element of
having partners which is what these cousins in this case need. Partnership gives an advantage of
combining different skills which will work for the benefit of the business (Langford, 2019). They
both can have advantages relating to taxes. The cost, profits and losses are shared among the

partners which is why a single person does not need to bear all the burden ad stress of the
business. Easy management of the business and share in the decision making process is why it
will prove to be the best for them. It also helps in better balance of work and personal life. As
they don't have an experience of running a business this type can give them ample opportunities
and sharing of thoughts between the partners can be a boon. As they can contribute to newer
perspectives in the business. Thus they should select partnership for setting up their business
entity.
Question 2:
(a)Did Yutaka have authority to sign the contract to buy the boat?
Ans: Contracts in Australia are governed under its Company law which lays down that a contract
must have an offer, Acceptance, consideration and intention. Yutaka being a Executive director
of the company had all the authority to sign a contract because he was still working in the
company but signing a contract for material personal benefit should not have been the aim of
him entering into a agreement. Because as a director he must act for the benefit of the company
“as a whole” means acting in the interest of the members of the company. He should have also
discussed about him buying the boat and entering into a contract with the other directors of the
company(Parker and Ward, 2020). Thus authority comes with responsibilities which was not
followed in this case when the decision taken was not in the interest of the company.
(b)Is Intoku Pty Ltd legally obliged to pay for the boat?
Ans: when Yutaka signed the contract for buying the boat as a director of the company, he made
company liable for the payment but the contract was illegal in the matter that it must have been
made with at least two directors consent. The boat dealer cannot sue the Intoku company for the
payment of boat because the boat was bought for personal benefit by Yutaka the executive
director. He as a director is responsible towards the company and its members. Thus the boat
dealer can sue the director instead of the company to fulfil the legal obligations which he was
promised. Because he doesn't have the authority to act alone on behalf of the company in case it
is not for the company's benefit (Quilter, 2020).

CONCLUSION
It can be concluded by the report that Business law and Contract law of Australia is
governed by several pieces of legislations which describes the rights and responsibilities when a
person works in a business structure or when he enters into a contract. All the obligations should
be fulfilled to stay away from their legal implications.
REFERENCES
Beatty, J.F., Samuelson, S.S. and Abril, P., 2021. Business law and the legal environment.
Cengage Learning.
Eldridge, J.A., 2019. Codifying Contract Law in Australia: Issues and Obstacles (Doctoral
dissertation).
Halberda, J., 2020. The principle of good faith and fair dealing in English contract
law. Pravovedenie, 64(3), pp.312-325.
Langford, A., 2019. Capitalising the farm family entrepreneur: negotiating private equity
partnerships in Australia. Australian Geographer, 50(4), pp.473-491.
Parker, D. and Ward, L., 2020. Business and Law in Australia. Thomson Reuters.
Quilter, M., 2020. Company law perspectives. Thomson Reuters (Professional) Australia.