LAWS1100 Lecture Notes - Lecture 11: Decision-Making, Corporations Act 2001, Share Capital
Document Summary
Business structures: sole traders, partnerships, joint ventures, trusts, companies, franchises. Formalities and cost; and: transferability of interest. A person is a sole trader if they directly own and operate the business themselves. A sole trader: may engage employees but they are the sole owner of the business, has sole responsibility for raising the funds to start the business, has sole control over the operation of the business; Is entitled to all profits of the business. There are no formal legal requirements that need to be satisfied to establish this type of business structure. Advantages: profit is not shared, no outside interference, easy to establish and manage; Low-cost and no formality: confidential, personal and high degree of control, decision making is speedy. Disadvantages: unlimited personal liability for the debts and other legal obligations of the business. Limited lifespan, no continuity: business closure or limited trading capacity due to holidays, illness or incapacity;
