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Examinable Chapter in Business law Part 4.docx - Chapter...

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Chapter 10: Business organizationsRECAP: Types of business organizations-In Australia, a business owner has a choice as to how they structure and runtheir business.-A range of factors must be considered when determining what type oforganization or structure is most suitable for a business.-As a general rule, simpler structures are suitable for smaller businesses andlarger enterprises require more complex structures.-Each business structure places different degrees of liability on the businessowners and operators. Important to understand in order to select the best legalstructure for a business.-The most frequently used business organization structures are:1.Sole proprietorships2. Trusts3. Partnerships4. Companies-Joint ventures are also quite common (e.g. in the resources sector) but theywon’t be covered here.RECAP: Choosing a Business Structure-Things to consider can include:1.size of the business2. risk3.purpose of the enterprise4.requirements of capital (or risk)5.privacy of the enterprise6.whether the business is likely to last for a long time or even forever-Things to consider can include:1.costs of establishing and running a business2.regulation and intervention of the law3. taxation4.control and equality5.ease of transferring the business6. intellectual-propertyWhat is a company?
-In Australia, ASIC and its subsidiary bodies have the responsibility of ensuringthat companies comply with the law.The powers of a company-The powers of a company registered under the Corporations Act are set out in s124, which provides that a company has the legal capacity and powers of anindividual both in and outside of Australia:1.a company is a legal person in its own right;2.a company has a legal personality distinct from that of its directors,shareholders (members) and company workers; and3.a company is endowed with capacities similar to those of a natural person(to enter into contracts, purchase property, borrow money, bring a legalaction, etc.).Separate legal personality-The company has a legal personality distinct from that of its directors,shareholders (members) and company workers.Example:Salomon v Salomon & Co [1897]Lee v Lee’s Air Farming Ltd [1961]Bringing a company into existence-A company must be registered by ASIC, which requires compliance at firstwith some basic procedures.

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Term
Spring
Professor
Robert Sandoval
Tags
Corporation

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