A Report Of Roger And Michelle Plan On Establishing Winery Coach Tours
1241 Words5 Pages
This report will advise Roger and Michelle how to establish their Adelaide Hills wine touring business. Ownership structures are considered, whether a partnership or private company would be more beneficial, together with important elements of business establishment and legal considerations, success factors, and future possibilities. Information was gathered from a variety of sources including government organisations, primary sources, and the South Australian Tourism Commission which provided reliable information. Numerous media articles and websites were referenced to support information as these sources were not as reliable as government organisations and primary resources.
Roger and Michelle plan on establishing…show more content… A written Partnership Agreement covers various legal matters, such as; partner contributed equity, how profits/losses will be distributed, and the name of the partnership.
A partnership has many advantages. It offers lower establishment costs compared to setting up a company. It allows a group of people to contribute their knowledge, skills, specialities, and allows for all financial assets to be combined. In the future, it would permit their children to be involved in the business. Also the partnership structure can be changed to meet longer term goals.
A disadvantage of a partnership is unlimited liability, meaning personal assets are at risk. Also if a partner incurs any debts or dies, the other partner(s) are liable (see Appendix A, page 8).
Private companies are the most common company structure in Australia and are often family owned, small to medium sized businesses. They can have 1-50 owners who buy shares to contribute capital. Once incorporated, the business becomes its own legal entity. This means that shareholders have limited liability equal to the amount of shares they own and none of their personal assets are at risk. Limited liability is an important benefit as it means that the shareholder’s personal assets are not at risk and are only liable for the amount of shares they own. It also offers potential to expand,