Sole Trader Partnership Joint Venture Trust Inc Associa. Uninc.
Association Company Franchise
legal entity No No If Company = yes No; unless statutory trust (dependent on statute) Yes, s21 Inc. Ass. Act No; (k) made only w/ trustee/privy of (k) Freeman v McManus Yes Salomon Case (at reg.) s124: can enter into (K) as artificial legal person Not business entity; franchise can be sued Type of liability Unlimited 3. Unlimited ss8-15 PA; 1. Limited: Individually liability 2. Limited for trustee following instructions human mistakes ok 1. Limited only as far as company: s27 liability of members; s70 public liability 2. UA cant sue/be sued/own prop; committee personal liab. (mayb indemnity) Bradley Egg unless long-term (k) Carlton Cricket; internal liability if legal ramifications/ external defamation Plenty; members sign = liab FvM 1. Limited unless wrong-doing 119 CA; liable to 3 rd party (stat. assumption of Agent) s129 CA; shareholders (limited amt unpaid on shares) s516 CA 3. Exposure to liability; increase risk w/ increase branches (risk w/ each franchisor: free-riding); liability to reputation/quality Trans. of inter. difficult as linked to indiv. expertise 2. Cant sell share without consent of other Ps; can sell right to share 1. Easily assignable (no consent needed) 2. Trustee changed by Appointer/principle -- 7. Watson v Johnson: interest of members exists only for duration of membership; not transmissible 2. Transferability of shares (sold) Yes (sold) Perpt succes Yes asset goes to deceaseds estate; often dies w/ ST 3. Death of partner terminates partnership; goes to surviving partner (as w/in (K)); holding out s17; Retiring s39(1); incoming s20(1) 2. Individual interests go to estate (?) 1. Death in unit trust goes to estate - ease of succession/estate planning (units go to estate) 1. Family N/A 1. Automatic to family N/A Finance Limited from ST/loan; no floating charge; no public funds 1. Limited agreement of all partners 2. Individual Cox v Coulson 3. Benefits (profits) go to beneficiary; payment made to trustee; reimbursement of reasonable expenses for trustee by beneficiary s72 TA Separate accounts; no pecuniary profits 1. No profit (pecuniary profits) Adamsons Case: profit-activities ok at market price; inexpensive startup; gen admin fee Watson v Johnson (buys u nothing) 4. Ongoing costs (investors; bank loans; assets); costly to establish Cost effective; fees payable: initial establishment; onging (licence, royalties); training; supply material via For; marketing Size
period
Form/ formaliti es 1 owner; can employ others. Duration limited to owner No formalities to estate 1. Start up easy/Cheap Limited by s115 Corps Act (matter of form not substance) by s5(1) PA; no formalities 1. Start up easy on agreement Unlimited. Based on Contractual agreement Keith v Mansell; Khan v Miah Cheap to form (equal to Part.) 4. Start up: complex for small SMEs; expensive to establish/maintain; Appointer (settlor) Trustee (LT) beneficiary (ET); by instrument oral/written; difficult to re-write deeds 3. Name; consti/ rules; lodge w/ ASIC; appoint secretary; reg. address; keep to-date; ann. general meeting/ financial return 2. No formalities; just meet Anderson: not-for-profit Burrell characterises: members; social (k) not binding Cameron v Hogan mutual understanding; structure; free to join/leave; continue exist independent of change in composition; historical moment of formation 5.Formation registration ASIC; costly individually; duration based on comp. Easily expandable; rapid market penetration; Initial ground work/investment intensive; expensive start-up cl 4 (exclude D) + initial obli FCCB cl10, 11; (K) inflexible External discl None 2. Limited partnership must be registered s56(b) 1. None 2. To beneficiary 3. ASIC 1. None; issue with privacy b/c ppl come and go at will 3. AISC if not listed; ASX if listed; or both; s129; ch 6: disclosure to shareholders (everything) *esp fundraise FCCB cl 6, 6B disclosure doc; regulated by ACCC Tax Personal tax rate 1. Benefit Pass through 3. Individual 2. Pass through; tax concession (tax free thresholds) - maybe disadvan. -- -- 1. Benefit fix 30% Maybe Manage + control Absolute 4. Within partnership s27; equal say but subject to agreement 2. Individual 3. By trustee; disclosed to Beneficiary BAD 3. Committee must comply w/ duties 2. Committee members 1. Limited sole director; consti s126 CA; more votes per share; majority share holder; corporate veil (Salomon); Promoter (personal liable; info) Limited depending on franchise rules/regulations: balance need for centralised control against benefits of individual management by Fee Reg body N/A Partnership Act QLD N/A Trusts Act QLD Associations Incorporation s Act QLD N/A Corporations Act Cth Franchising Code of Conduct code not Act; read like statute (July 1/10) Termina t Individual 2. Expiration s35(1)(a); undertakings done s35(1)(b); notice s35(1)(c); operation of law 36; illegality s37; Court s38 1. Individual decision 5. By beneficiary in accordance to terms; difficult before matures -- 1. Easy (at will of members) 4. S491 dereg. With ASIC but costly Uncertainties: termin., renewal, sale; Breach by Fee cl21; no breach cl22; exit clause in (K); special circumstances cl23 Buz prop. Individual 2. 23 original 24 acquired later 6(1)(a) P property: JT; Exception Kelly v Kelly (not intended as part of P) 1. Individual: TIC 3. No one owns: LT = Trustee; ET = beneficiary -- 3. Only on trust; UA cant own 2. Owned by corporation; Macaura: shareholders own no prop of company Intellectual prop (trademark, logo, etc.)= w/ goodwill s9 CA + FCCB cl4 Rem. indemnity insurance (law firm); term of (k) (K); none Indemnity; Part 6 TA; (K); dont act outside duties Wyman Cameron v Hogan: internal rules; not bound (legally social (k)); External Plenty Promoters: pre-reg (K): Rescission (untrue discl doc ss728,729), damages, recovery, construc trust, recovery by liquidators ss567,588FH ; external indemnity, internal not s132 Post-reg: ratify pre-reg(K); sue promoters; novation (execute (K) on similar terms); shelf-comp -- insurance??