Limitation & Formation
The Partnership Act, section 115 indicates that there is a limitation of the capital raising due to partner numbers which is only between 2 to 20 partners, excluding the certain professional practitioner such as accountants and lawyers. A partnership can be easily formed by conduct, oral and written agreement among partners, or even a combination of them. However, the partnership may easy to terminate if anyone of the partners pass away or leave the business because the partner’s share is usually hard to sell and transfer due to inside agreement and private operation. The cost of creating is inexpensive, the partnership needed only to apply for the Australian Business Number (ABN) and if it prefers to use the business …show more content…
Additionally, the default rules outline the interests and duties of the partners are being applied into the business, section 24(1) of the Partnership Act. The rules consist of partners’ permission for remuneration or payment; the bargain of sharing profits, losses and capital; and the matter of conflict occurs with solution . Section 5(1), described that every partner act is assumed as an authorised agent for carrying on the business’s purposes. For example, partner A will be bound into the contract involved by partner B, even though partner A did not agree to. Therefore, the statement of agreement should be minimised the future’s conflicts as much as possible, which is rarely chance as we cannot predict the …show more content…
There are no requirements or obligations to provide the partnership’s financial statements and disclose any notes through the public because there is a small number of the partners and simple function in the business. Therefore, an expenditure of the business can be minimised, especially for paying auditor and tax specialist.
Thus, for a corporation is firmly required and regulated by the ASIC, ASX and other authorities such as Australian Taxation Office. The company must provide all the information including financial performance and note disclosure to the public, shareholders and related authorities with increasing in operating cost. For instance, the company have to hides an auditor to audit the financial statements according to Australian Accounting Standard Board (AASB).
Conclusion
Both partnership and corporations have their own advantages and disadvantages. It is much more easy to set up a partnership, even there are unlimited liability and riskier for losing the partners’ assets. Since, a corporation requires more complicated procedures under the Corporations Act based on it types and management, it provides more benefits from separate legal entity. As results, choosing a suitable structure of forming business should be based on the business’s objectives and members’
The Partnership Act, section 115 indicates that there is a limitation of the capital raising due to partner numbers which is only between 2 to 20 partners, excluding the certain professional practitioner such as accountants and lawyers. A partnership can be easily formed by conduct, oral and written agreement among partners, or even a combination of them. However, the partnership may easy to terminate if anyone of the partners pass away or leave the business because the partner’s share is usually hard to sell and transfer due to inside agreement and private operation. The cost of creating is inexpensive, the partnership needed only to apply for the Australian Business Number (ABN) and if it prefers to use the business …show more content…
Additionally, the default rules outline the interests and duties of the partners are being applied into the business, section 24(1) of the Partnership Act. The rules consist of partners’ permission for remuneration or payment; the bargain of sharing profits, losses and capital; and the matter of conflict occurs with solution . Section 5(1), described that every partner act is assumed as an authorised agent for carrying on the business’s purposes. For example, partner A will be bound into the contract involved by partner B, even though partner A did not agree to. Therefore, the statement of agreement should be minimised the future’s conflicts as much as possible, which is rarely chance as we cannot predict the …show more content…
There are no requirements or obligations to provide the partnership’s financial statements and disclose any notes through the public because there is a small number of the partners and simple function in the business. Therefore, an expenditure of the business can be minimised, especially for paying auditor and tax specialist.
Thus, for a corporation is firmly required and regulated by the ASIC, ASX and other authorities such as Australian Taxation Office. The company must provide all the information including financial performance and note disclosure to the public, shareholders and related authorities with increasing in operating cost. For instance, the company have to hides an auditor to audit the financial statements according to Australian Accounting Standard Board (AASB).
Conclusion
Both partnership and corporations have their own advantages and disadvantages. It is much more easy to set up a partnership, even there are unlimited liability and riskier for losing the partners’ assets. Since, a corporation requires more complicated procedures under the Corporations Act based on it types and management, it provides more benefits from separate legal entity. As results, choosing a suitable structure of forming business should be based on the business’s objectives and members’