Assignment Questions On Business Structures

2252 Words10 Pages
Name: Gaurav Gujral Student number: 12022827 Word count 2252 Part one: The list of questions and the answers given by the client: It has been decided by the clients that they are willing to start a new business but still they have not decided regarding the business structures that should be adopted by them for this purpose. Some of the commonly used business structures in Australia are sole traders, partnerships, companies and joint venture. In order to decide the most suitable business sector for the clients, the following questions have been asked. Q1: The new business will be started by how many persons? Ans: There will be 3 to 4 persons were going to start a new business. But in this context, it needs to be mentioned…show more content…
Q5: Do you want the benefit of the limited liability from the business structure adopted by you? Ans: Yes, we want the benefit of limited liability because we do not want that our individual assets can also be held liable for the debts of the business. Q6: How do you arrange for the funds required for establishing the business? Ans: Some of the funds will come from our own savings but for the rest of the funds, in such a case we may have to take a business loan. Q7: If you want to expand the business, do you have sufficient capital for it? Ans: No, we do not have the funds required for the expansion of the business.we may have to look towards outside sources. Part two: Research into the Relevant Law In this part, the law that is relevant to deal with this issue has to be analyzed. After examining the answers given by the clients, it seems that the business structure of a corporation will be most suitable for the clients. The other option is to create a partnership for the business. However it is not possible for the clients to run their business as a sole trader because it will be started by 3 to 4 persons jointly. Under these circumstances, the relevant legal provisions related with the incorporation of the company and running the business as a partnership need to be evaluated so as to decide which business structure will be most apt for the clients and which will provide the maximum benefits to the clients. The law provides that after the
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