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??