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You are starting a business which sells mobile phones. What business structure would you choose? Explain in detail why you have made this decision.
MobiPhone Express is a company that has just been launched with the core mission to sell original mobile phones within Australia and across the globe from different manufacturers. The business assumed company structure due to several factors that were considered by stakeholders.
The decision for the business to adopt the company structure was due to the convenience associated with this structure. For instance, according to Gibson and Fraser (2009) in chapter nine, once the business is registered as a company in Australia, it is allowed to conduct its business activities across the Australian states without having to register in every territory and state jurisdiction. This is not the case with other business structures such as sole proprietorship and partnerships which are required to register with every state authority that they seek to operate in.
Is the business name you chose available? What checks did you make to ensure it was available? Explain in detail the process.
MobiPhone Express which is the business name of the company is not available. Nonetheless, there are three businesses with the names; Mobi Phones, The Mobi Phone Group, and Mobi-Phone Communications. However, their names are closely related to MobiPhone Express but they are not the same. To ensure that there was no matching name as that of the business, relevant searches were done from the Australian Securities & Investments Commission (ASIC) website where all business names are registered.
Define the essential characteristics of a company
There are several essential characteristics of a company that must be considered when forming a business entity of company status. To begin with, a company must be a detached legal entity. According to Gibson and Fraser (2009) in chapter nine, accompany is said to be different and detached from its members when it has its distinct seal and a distinct name. Moreover, in terms of assets and liabilities, they are said to be distinct and separate from those owned by their members.
Nonetheless, limited liability forms another essential characteristic of a company. About the liabilities that are incurred by the company, members are only limited to cater for them about the ratio of their contribution to the company asserts up to the maximum value of shares held by respective members (BLAW001). This protects members’ personal property from being encroached in the event when the company asserts is unable to repay their creditors.
In addition, according to Gibson and Fraser (2009), another essential characteristic of a company is that of having a common seal. A company’s common seal is taken to be an artificial person with no physical presence.
What rules would you use to internally manage the company? Where do these rules come from?
According to Gibson and Fraser (2009) chapter nine, before registering a company, it is imperative to have a detailed blueprint on how it will be managed internally. However, the management relates to the rules that will specifically be applied in the management. About this, MobiPhone Express will use a combination of the following rules for its internal management
The company will use replaceable rules in its internal management. According to Gibson and Fraser (2009), the internal management of a company may be governed by the Corporations Act 2001 which applies to the company as replaceable rules. In addition, Australian Securities & Investment Commission also adds that a company may supplement this by application of its constitution. Therefore, MobiPhone Express is going to apply both rules in its internal management.
What are the duties of officeholders of the company?
The duties of office holders in the company are different given the office an individual is holding in the company. However, the duties of office holders such as the director are taken to be the driver of the whole company hence their role and duties take precedence. According to Gibson and Fraser (2009), the major duty of the officeholder of the position of the directors is to be fully acquainted with what the company is doing. Therefore, the officeholder accomplishes this by engaging in a multiplicity of duties which include assessing how the company’s proposed action is likely to affect the business performance of the company. Moreover, the director is obliged to manage the management staff to ensure that they are committed to the attainment of the company’s goals and objectives.
Conclusion
To wind up, MobiPhone Express decided to assume a company structure due to the flexibility associated with it. For instance, Gibson and Fraser (2009) in their chapter nine that relates to business structure affirm that once a business is registered as a company in Australia, it has the liberty to conduct business in all Australian states without necessarily seeking fresh authority permission from these jurisdictions. This is a plus that MobiPhone Express seeks to bank on to expand its business empire in the region.
References
Gibson, A. & Fraser, D. (2009) Business Law. 4th ed. England: Monash University Press.
BLAW001. Business Law and Ethics Lecture Slides Week 5.
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