Essay on Summative Week 2 Part B

Essay on Summative Week 2 Part B Essay on Summative Week 2 Part B Executive Summary One of the key decisions you'll make when starting a business is which legal structure to use. Because it's such an important decision, you should get advice from a qualified independent business, financial or legal advisor. A business name is simply a name or title under which a person, or other legal entity, trades. It not only identifies you to your customers, but also allows you to differentiate yourself from your competitors and enables your customers to make an emotional connection to your business and brand. For many businesses, the name is often the most valuable asset. Decisions made by Business Structures and Business Name also directly impact within the financial advisory services firm which provides advisory service on various types of accounting and business compliance and management issues. Introduction This report will contain information related to legal requirements to setup the Business Structures also advantages and disadvantages of each business structures in Australian. The process of registering a Business Name in NSW for presentation to the client also provided to the relevant section of various legislation and common law. Main Contents 1. Business Structures you choose will depend on the size and type of business, along with your personal circumstances and how much you want to grow the business. Keep in mind that if you need to, you can change your business structure later on if you find that a new structure will meet your needs better. 1. Public companies Legal Requirements Profit/asset test Shareholder spread Certain constitutional and corporate governance requirements Prospectus for the capital raising, a minimum issue price of $0.20 Advantages There is limited liability for the shareholders The business has separate legal entity. These businesses can raise large capital sum as there is no limit to the number of shareholders. Disadvantages There are lot of legal formalities required for forming a public limited company it is costly and time consuming The original owners may lose control Public Limited companies are huge in size and may face management problems such as slow decision making and industrial relations problems. 2. Private companies Legal Requirements Deciding if a company structure is right for you Choosing a company name Deciding how to operate your company Understanding your legal obligations as an officeholder Getting the consent of those involved in your company Registering your company, and Understanding your legal obligations regarding your company name, Australian Company Number (ACN) and Australian Business Number (ABN). Advantages Your liability for the company’s debts is limited, although this protection can be destroyed by creditors, including financiers, calling for guarantees from company directors It’s easy to transfer ownership by selling shares to another party Shareholders (often family members) can be employed by the company Taxation rates can be more favourable You’ll have access to a wider capital and skills base. Disadvantages The company can be expensive to establish and maintain You are required to provide annual and other returns to the Australian Securities and Investment Commission (ASIC) Your financial affairs are public Directors’ activities are scrutinised by ASIC It can be costly to wind up the business. 3. Trusts Legal Requirements Written trust agreement Business name registration Registering for an ABN number with an Australian address Advantages Limited liability is possible if a corporate trustee is appointed The structure provides more privacy than a company There can be flexibility in distributions among beneficiaries Disadvantages The structure is complex The Trust can be expensive to establish and maintain Problems can be encountered when borrowing due to additional complexities of loan structures 4. Partnerships Legal Requirements Written agreement Business name registration Registering for an ABN number with an