Present Law Assignment Help
In the present paper, we are going to discuss the different laws of the Corporation Act, in relation to the two case studies provided to us. We will discuss the different forms of businesses and the director’s duty and the veil of the corporation and will discuss the two case studies.
The main issue in the present scenario is which form of business is the better sole trader, partnership or company. Here we will discuss the positive and negative aspects of all these three and which form of business will be most suitable for Mary.
Legally a business can be done in many ways and each of these business structures has some positive and negative aspects. Mary is a sole trader which the easiest form of setting up a business as it is cost effective and there are not many legal obligations to be fulfilled. Here we will discuss the different forms of legal business structures apart from Sole trader as Mary’s business is expanding so she wants to change the structure of her business therefore below we will discuss the business structures like (QUEENSLAND GOVERNMENT, 2014):
PARTNERSHIP: it is the business structure in which two or more people do a business together where they are the co-owners and they also share the income of the business and all the owners of the business act on the behalf of the business. Legally a partnership is not a separate legal entity.
Advantages of partnerships:
- Partnerships are easier and the most cost effective form of business after sole proprietorship business.
- Partnerships carry on the business with the help of many people’s expertise and resources.
- Partnerships do not require to disclose their profits to the public at large
- Partners share the profits and the loss of the business so the burden is not on one person
- Changing the legal structure to a company is easier in a partnership than in a sole proprietorship.
Disadvantages of partnerships:
- All the partners become responsible for the debts of the company and this liability is unlimited.
- The taxes increases with the earnings of the business as the taxes are charged as the personal tax rates of all the partners
- Partners cannot transfer their liability to someone outside the partnership if the partners do not agree.
- Partnership does not have a separate legal entity
To form a Limited partnership, the Office of Fair Trading is needed to be contacted and applied, this form of partnership is only required if the other partner is a silent partner (QUEENSLAND GOVERNMENT, 2014).
 QUEENSLAND GOVERNMENT, 2014, Business legal structures, <http://www.business.qld.gov.au/business/starting/business-startup-options/business-legal-structures>
 QUEENSLAND GOVERNMENT, 2014, Partnership business structure, <http://www.business.qld.gov.au/business/starting/business-startup-options/business-legal-structures/partnership-structure>