TABL1710 Lecture Notes - Lecture 12: Franchising, Independent Business, Corporations Act 2001
7 May 2018
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TABL – Part BUSINESS
STRUCTURES
TYPES OF BUSINESS STRUCTURES
• There are different ways of structuring and running a business in Australia
• Which particular type of organisation or structure is most suitable for a particular
business depends on a range of different factors
• For smaller businesses, the simple structure are likely to be the most suitable
• As a business grows or changes, its structure can be changed as appropriate
• The most common types of business organisation are:
o Sole proprietorship/sole trader
o Trusts
o Partnerships
o Joint ventures
o Franchises
o Companies
SOLE PROPRIETORSHIP/SOLE TRADER
• The simplest way of structuring a business is for one person to own and operate it:
this tpe of usiess is ko as a sole popietoship o sole tade
• No legal distinction is drawn between a sole trader and their business
• Sole traders themselves acquire all the rights and liabilities that are created in the
course of running their businesses
• A sole trader can contract with other persons to provide goods or services for
business purposes, but the relevant contract exists between the sole trader
personally and the supplier
• The profits made by a sole trader belong to the sole trader: they are treated as part
of the sole tades o ioe; ad ae taed as such
TRUSTS
• A trust is created when one person (the settlor) transfers property or money to
another person (the trustee) to hold the trust property on behalf of/for the benefit
of/on trsut for a third party or parties (the beneficiaries)
• A trust is not regonised as having a separate legal existence from the trustee. Its not
an entity but a set of relationships
• The trustee has the legal tutle to the trust property while the beneficiaries have the
benefical ownership
• Trustee has a fiduciary (good faith) duty to the beneficiaries and must administer
trsut property in accordance with the terms of the trust
• The main advantage of operating a business as a tust is that the income from the
business can be distributed between a number of benefices provides income tax
advantages
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Partnerships: a partnership is created when two or more persons join together. It is the partners who acquire the legal rights and liabilities incurred in the course of business. In return, franchisee pays franchisor a fixed fee or percentage of profits: advantages. Ability to benefit from an exisiting and successful name and reputation so less chance of business failure. Ability to compete with national and international firm despite being a small entrepreneur. Access to business s(cid:455)ste(cid:373) de(cid:448)eloped u(cid:374)de(cid:396) f(cid:396)a(cid:374)(cid:272)hiso(cid:396)(cid:859)s (cid:373)a(cid:396)keti(cid:374)g, (cid:271)usi(cid:374)esss and technical plan. Locked into a binding agreement with control by franchisor. Franchisor appointing other franchisees in same geographic area. Franchisors charging excessive price for goods supplied to franchisee. Companies: a company is an artificial legal person (a corporation) that is created by a process (cid:272)alled (cid:858)(cid:396)egist(cid:396)atio(cid:374)(cid:859) u(cid:374)de(cid:396) the p(cid:396)o(cid:448)isio(cid:374)s of the co(cid:396)po(cid:396)atio(cid:374)s a(cid:272)t (cid:1006)(cid:1004)(cid:1004)(cid:1005, companies are registered as either public companies or private companies. Individuals become members of a company by buying shares in the company.
