Congratulations! You have secured a graduate position with a large firm of corporate advisers. Hannah Finley, a partner in the practice, asks you to attend an 10:00 a.m. meeting on Monday with herself...

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Congratulations! You have secured a graduate position with a large firm of corporate advisers. Hannah Finley, a partner in the practice, asks you to attend an 10:00 a.m. meeting on Monday with herself and Russel Robbins, a longstanding client of the firm. You will be required to take notes and prepare answers to Russel ’s queries. Russel Robbins is married to Megan Mays. They have one child, Ellie, who attends a local private school. Russel is very entrepreneurial and has been running a second-hand and vintage clothing business in Albury, NSW, by himself as a sole trader for the past five years under the business name of Pinnaclewear. A lot of Russel’s customers are other businesses, both local and overseas. Turnover was $285,000 in the first year and has now grown to over $3 million per annum. The business operates from rented premises, but Russel would prefer to buy a building. Currently, Pinnaclewear employs eight staff. Russel has plans to expand the business further. He also wants to diversify into food and catering in the near to medium term. Russel’s mother, Violet, is a retired accountant and he regularly asks her for advice. Violet suggested recently that Russel should structure his business as a company. Russel is unsure about this. He makes an appointment to see Hannah Prior to the meeting, you review Russel ’s file and note that he and Megan have the following assets. • A family home in Wodonga with a market value of $1.25 million. There is a mortgage on the property of $561,000. The house is owned by Megan. The house was previously owned by Russel and Megan , but when Russel started up his business, it was decided to transfer the house solely to Megan for asset protection reasons. • A share portfolio. Russel and Megan jointly own 1000 Telstra shares, which cost them $3.30 per share, and 500 Commonwealth Bank shares, which they bought when they first married. The Commonwealth Bank shares cost them $10.90 per share. The Telstra shares are currently worth $3.09 per share and the Commonwealth Bank shares are worth $61.00 per share. The shares are intended as an investment for Ellie — they will be given to her when she turns 21. Russel and Megan also jointly own a portfolio of blue chip Australian shares currently valued at $145,957. • Two motor vehicles. Megan owns a BMW Series 7 worth $ XXXXXXXXXXRussel owns a VW Transporter Van worth $18,000, which he uses for the business. • Office furniture and equipment. During the course of the year, Russel bought computers, desks, other office furniture and shelving for the business which cost him approximately $ XXXXXXXXXXTheir current value in the financial accounts is $8,650. • Superannuation. Russel has $190,568 in superannuation and Megan has $136,000 in superannuation. Page 6 of 8 HA3021 Corporations Law Individual Assignment T1 2021 In addition, Megan works as a sales and marketing manager in the city for a financial services company. She is on a total salary package of $155,000. At the meeting, Russel hands over last financial year’s business results and his draft budget of sales and expenses for the coming financial year. The budget for the new year shows expected sales of $3,764,000 and a net profit of $637,979. Issues to be considered During the meeting, Russel has a number of questions relating to important issues surrounding the future of his business. Answer the following questions relating to Russel ’s matter:(1) What options does Russel have to structure the Pinnaclewear business? Name each business structure used in Australia that Russel can choose and then define and describe the basic characteristics of this business structure.(2) From the facts presented, identify the important issues that will arise as Russel chooses the best type/s of business structure/s and the factors that he will need to consider in choosing the right business structure for his business
Answered Same DayApr 22, 2021HA3021

Solution

Jose answered on Apr 22 2021
47 Votes
The University of Queensland
1
Management
Management
Law
Individual
Lecturer:
Student Submitting:
Due Date: 12/4/2021
Abstract
While analyzing the laws and rules in Australia, we can understand that it is supportive to the business organization. The selection of a business structure or a form is based on various factors. An appropriate business structure helps for attaining the goals and objectives and it also helps for improving the productivity of the organization. While selecting a business structure the people have to consider the liability to the partners and the size of the organization. In this research paper, we are analyzing a case study and we are focusing on the business structures used in Australia and we are analyzing its merits and demerits. 
Question 1
What options does Russel have to structure the Pinnaclewear business? Name each business structure used in Australia that Russel can choose and then define and describe the basic characteristics of this business structure.
While analyzing the laws and rules in Australia, Russel has different operation for effectively structuring the business. Now we can analyze each business structure used in Australia that Russel can select in a detailed way.
Partnership firm
The first option that Russel can use this partnership firm. It is easy to start and operate. For starting and operating a partnership firm we need partners, either Russel can use his wife as a partner or he can select from the family or the outside. In a
partnership firm, partners share the profit and loss based on the amount of capital invested by them. Compared to the company we can easily start a
partnership firm and it provides freedom for the partners to take quick decisions (Bodle et al 2018,p.12). The Magna Carta of partnership firm is a partnership deed and it includes the details of the partners, basically their address, income level and capital invested. The Australian government is highly supportive of the individuals who are interested to start a partnership business. We know the fact that for managing the operations of business we have to give importance to proper control and coordination. Compared to other forms of business it is easy to control and manage the operations and it also provides freedom for the partners to come up with new ideas and plans.
LLP
Limited liability partnership can be called another form of business structure.
Partners have limited...
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