LAW205-Corporate and Commercial Law for Accountants

Question 

Bill wants to establish a property management business in Darwin called Bill’s Property Management Services. 

Bill and his wife Mary have come to you as their accountant for advice about an appropriate business structure for their business. They want to know of the different options, advantages and disadvantages of various business structures. Mary is concerned about protecting their home for their young family, as she has heard of cases where the family home is lost when the business fails. 

Bill will initially be starting the business by himself with some help from Mary. He may later ask his friend Steve to join in the business as Steve can bring in additional capital and business skills to expand the business. 

They are specifically interested in the following advice: 

1.  Can Bill undertake a business in his own name and if so, how does he register the business? How can Bill include Mary as a co-owner of the business? 

2.  What are the features of a “company” structure and what is the process of registering a company? Can Mary also become a part owner of the company? Can Bill arrange for Steve and other associates join in the business at a later time? 

3.  What are the advantages and disadvantages of operating a business as a “company” rather than a sole trader or partnership? 

4.  How can Bill and Mary protect their personal assets in case the business fails? Are there any other structures that will help ensure that their house will always be protected from the creditors? 

5.What are the reporting obligations of the different business structures and how are they regulated?