Professional Documents
Culture Documents
Starting a
business
Preparation
Selecting a business structure
Licences and registration
Renting or buying the premises
Franchising
Opening for business
Preparation
Chapter 10
Starting a business
Preparation
Before a person starts trading, they
should:
do some research,
protect the IP,
prepare a plan,
raise some money, and
take out insurance.
Selecting a business
structure
Chapter 10
Starting a business
Business structures
When starting a new business one of the most
important legal questions a person will have to
answer for themselves is which business structure
they will adopt. A business structure is the legal form
of a business organisation.
The most common types of business structure are:
the sole trader,
the partnership , and
the company.
Note that these business structures are not mutually
exclusive. Two or more companies, for example, can
form a partnership.
Business structures
continued
Sole trader
A person is a sole trader if they directly own
and operate the business by 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, and
is entitled to all of the profits of the business.
Sole trader
continued
Partnership
A person is a partner in a partnership if they
and at least one other person directly own
and operate a business together.
Mutual liability: Each partner is both the
principal and the agent of the other
partners.
Each partner has unlimited personal liability
for the debts of the partnership.
Partnerships are regulated by State/Territory
partnership legislation.
Partnership
continued
Partnership
continued
Partnership
continued
Partnership
continued
Company
A corporation is an artificial legal person
separate from its owners and able to make
contracts, own property and be a party to
litigation in its own name.
A company is a type of corporation; one
incorporated under and regulated by the
Corporations Act 2001 (Cth).
Types of corporation
Figure 10.2
Company
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Company
continued
Figure 10.3
continued
5.
6.
7.
continued
continued
continued
Table 10.4
continued
Table 10.7
Franchising
Chapter 10
Starting a business
What is a franchise?
A franchise is a contractual arrangement with a
franchisor according to which the franchisor
permits the franchisee to:
use the franchisors business name and/or
trade mark,
manufacture or sell the franchisors products,
and/or
use the franchisors business system.
In return the franchisee pays to the franchisor a
regular fixed fee and/or a percentage of their
income or profits.
What is a franchise?
A key feature of the
franchise arrangement
is that the franchisor
and the franchisee are
(usually) not partners,
employer and
employee, or principal
and agent, but separate
contracting parties who
are generally not
responsible for each
others actions.
continued
continued
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Setting up a website
A business can operate an online business
24 hours a day.
Domain name disputes can usually be
resolved without resorting to litigation by
using either the auDA or the WIPO dispute
resolution process.
Setting up a website
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