Partnerships, Trusts, And Companies For Business: Nature, Characteristics, And Advantages And Disadvantages
Partnership
With the intention to start a partnership business, Oliver and Emma must be aware of certain rules, regulations, and laws that are prevalent in Australia. Prior to identifying the rights as well as duties of Oliver and Emma’s business, nature, characteristics, advantages, and disadvantages of their partnership, trust, and available companies needs to be understood. This has been explained in the following sections.
A business partnership can be regarded as a process of collaboration, wherein two or more individuals or organisations are engaged in developing new business for the purpose of attaining profitability. Fundamentally, both parties are treated equally in a particular type of business. Though both members may or may not be involved in different works in the business. It depends on their contracts as well as trust on each other. In the case of Oliver and Emma, the latter plays a major role, whereas Oliver plays a minor role in the business.
As per the above discussion, the contribution and participation of partners within the business is not limited. It based on the self-considerations as well as mutual understanding. In the case of Oliver and Emma, both will receive profits based on their partnership contact. Fundamentally, there are three types of models are observed to be in the partnership business, which includes the neoclassical economics model, neo-liberal model, and conventional business partnerships model. The business can also be considered to be a conventional business partnerships model because neoclassical has been conducted by big companies for market acquisition. On the other hand, a neo-liberal partnership exists when two companies are working together due to market and economic demand of a particular product.
The advantage of the partnership business will be that both Oliver and Emma will receive the expected return from this type of companies. In partnership business, it is observed that risk involved in the business is shared equally between the partners. Contextually, each partner has adequate knowledge regarding the sectors they will work. This can be considered as the major advantages of partnership business for Oliver and Emma’s. At the same time, Oliver is financially strong for the business, wherein Emma is physically and technically strong to operate the business adequacy. It will help them to conduct business collaboratively, wherein they can resolve the emerging issue easily.
Not only advantages, but there are also certain disadvantages that exist, in the partnership business. Initially, both partners are not aware of their past. Any kind of bad intention to harm another partner in business can lead to creating an issue within the business, wherein parties can claim rights as well as other factors based on the business partnership law 1963. It can lead the business towards the loss. On the other hand, conflict can arise anytime, which can also affect the business. Hence, these can be considered as a major issue in the business of Oliver and Emma.
Characteristics
Trust can be regarded as a belief and reliability of an individual over the other partner with respect to the business. It is an important aspect in any business, as it can help in creating a good operational environment. At the same time, trust builds up a good relationship between the partners as well as the customers. With respect to Oliver and Emma, trust plays a major role, as the success of their business depends on it.
Trust depends on an individual’s ability, strength, and personality. Synchronizing along with developing a relationship with other persons or organisations can be considered as the main motive of trust. In respect to the business, trust is a process of developing a business relationship by holding assets of a client or party for the purpose of attaining profit from the market. Therefore, Oliver and Emma should develop their own and organisational trust so that performance can enhance.
Trust between the partners in an organisation is receiving five types of advantages. Initially, an organisation is able to successfully place its business in the market if there is trust between the parties, who are to be engaged in a partnership. Secondly, trust can provide a competitive advantage to an organisation, which can help in operating the business efficiently, whereas the rival companies can face the issue in business. Additionally, a loyal and productive market can be possible to establish by maintaining trust. Furthermore, a strong market relationship can be introduces, which can help an organisation to survive in the market successfully. Finally, the relationship developed on the basis of trust with both the customers and shareholders can help in overcoming of any organisational crisis and provide time to recover. Oliver and Emma must focus on these factors so that their business can achieve market success.
Developing and maintaining trust between the individuals can be perceived as an aspect within an organisation. Initially, establishing trust is a structured process along with being complicated. Any wrong step can affect the organisational reputation. In addition, a trustee can use his power in the business in a wrong way. It can lead to a situation, wherein an organisation may face the issue in borrowing loans from the banks. Oliver and Emma must have adequate knowledge of each of the above-mentioned factors about these factors prior to making an investment in their business.
As per the case scenario, it has been identified that Oliver and Emma will focus on covering various business owners and tenant along with contractors to facilitate asset management, building audits, building repairs, fire protection, reporting, tendering, as well as invoicing. Hence, the nature of the new business will remain active so that it can help in obtaining fees to Oliver and Emma.
Advantages
With respect to the characteristics of any construction company, it can contact Oliver and Emma for asset management, audits, repairs, fire protection, reporting, tendering, and invoicing. Besides, ordinary companies or local businesses also can contact them for receiving adequate service from their business.
The demand for the work can be considered to be high within the market. Each business firm requires a good financial supporter to check as well as develop financial statements. Hence, Oliver and Emma can fulfill this demand of customers. Adequate service can lead their organisation towards attaining market success. Additionally, it can also reach their expectations within a short period of time.
In the context of disadvantages, market competition can affect the company. At the same time, Oliver and Emma may face the issue of establishing a work from different clients. Customers or companies may not show interest to receive their services. Hence, Oliver and Emma must focus on marketing their business so that companies can get attracted to using their services.
Summarise The Rights, Duties, And Liabilities Associated With The Various Partnerships, Trusts, And Companies Available To Oliver And Emma.
With the aim of establishing a firm, an organisation must follow up certain rights, duties, and liabilities. In the partnership business of Oliver and Emma, both need to know about the legislation related to the partnership as well as trust. For this reason, relevant legislation has explained below.
Initially, both the parties involved in the partnership incorporate a mutual right prior to establishing any business. According to section 36(1) of Partnership Act, a partnership firm must have own account or book to record data and cash. All the benefits have to be deposited in the firm’s account. The partners have no rights to deposit the profitability amount in their personal account. Only ‘share of profits’ can be allowed to keep but the amount has to be allowed by the other partner of the business, (section 36(2)). Each partner has equal rights in the business property. Partners must consider other property and each partner has legal rights takeover own property after the business dissolution. However, mutual rights play a major role in here, thus a legal contract may be signed between the partners, wherein one partner can restrict another partner to regarding the property.
According to section 29(1to 11) of the Partnership Law 1963, each partner has equal duties to perform within a firm. Loss or profit has to be divided between the partners. However, loss of the firm has to bear by both partners. In any circumstances, if one of the partners invests large capital for the business with other partner’s permission, then the other partner must provide 7% interest on the investment on return. With respect to the management, each partner of a business has to involve in the management process. Non-participation can be treated to be an offence in partnership law. Remuneration process is not applied to the partners, as they are not entitled to any wages or salary from the business. As per the partners’ consent, any person can join as a partner of the firm, however, it should not affect the business. Financial books are not allowed to be kept for personal purposes. It has to be stored in the firm and each partner has equal rights to analyse statements for their own and business purpose. These aforementioned factors are major duties that are to be performed by the partners within a firm.
With respect to the liabilities, each partner has limited responsibility towards the organisation. Debt and obligations can be carried by both partners. In any circumstances, one partner is dead, and then the liability of the dead partners will not be carried out by another living partner. In addition, debts and obligations will be treated separately. Each partner has limited liability, debt, obligations, and responsibility. However, an agreement must be formed before the partnership. In any situation, the agreement has evidenced the debt and liability should be taken by another partner after death, then only the aforesaid rule will not be accepted by the living partner.
Oliver and Emma must fulfill the abovementioned legislation prior to conducting partnership between each other regarding their business. Their partnership agreement will cover all the legislation to establish a successful and legal business.
Trusts Act 1973Rights
According to the Trusts Act 1973, trust must be incorporated on a trustee in order to provide security on a business object. The trustee has enough power to create trust in the market. The only trustee is responsible for this kind of business activity. Hence, partners of an organisation must provide adequate security as well as protection to a trustee, which are his/her major rights in an organisation. In the case of property, any person cannot claim the property to be his or her own. Claimer must prove the fact in front of the court with the help of the trust law. Hence, Oliver and Emma must focus on these factors to develop their business; however they have limited rights in business.
A trustee has the legal power of making the investment within the firm based on the circumstances. Initially, trustee’s engagement within the business is a major point, where this rule can be implemented. With respect to the duty, a trustee must invest a certain amount of money once in a year. However, the trustee can discharge himself or herself to pay the entire investment amount. In any reason, if a trustee is either suspected or caught as a fraud, then it can be considered to be an offence. Hence, maintaining the aforesaid legal circumstances are the major duties of a trustee within an organisation.
The trustee has no right to misuse his power of discharge. In this context, the misuse of power within an organisation will be treated as a legal offence in business. A trustee has major responsibility for the invested money. Trustee provides security regarding a large amount of money, hence he or she does not breach the contract. This is due to the fact that trustee has the liability to secure the money. A trustee has a liability to establish insurance regarding the property, which will be considered as a legal activity. However, breach of trust can be considered as a criminal offence, wherein the court can take a decision against the situation. Thus, Emma and Oliver can be considered to be the main trustee of an organisation. However, Emma will invest in the business, hence she can take the part of the trustee. A legal agreement between Emma and Oliver can help in developing trust within the market.
In the business partnership of Oliver and Emma, the clients also have certain rights in the business. According to the Australian Consumer Law and Fair Trading Act 2012, an organisation must deliver a fair product and service based on the price. At the same time, an organisation cannot force the customers to purchase the product directly. Hence, the customers have certain rights in the market while taking products and service from a business outlet. With respect to Oliver and Emma, they must be aware of the above-mentioned customers or clients rights at the time providing a cloud-based solution to the customers.
Duties
Except for above-mentioned rights, Oliver and Emma as well as the companies or clients have certain responsibilities while conducting the business. Initially, maintaining trust is the major duty of a company, wherein Oliver and Emma play a major role. At the same time, duties do not depend on the legal personality. It is based on the services as well as products as along with rights and powers. However, trustee’s power has increased through the regulatory regime of an organisation. In here, Oliver and Emma are the trustees, who have the duty to develop a regime, wherein the customers can receive adequate service.
Liabilities
With respect to the liability, the companies are liable to provide adequate fees for the services or products. On the other hand, Oliver and Emma also have the liability to maintain the above-mentioned law during the period business and its operations within the market.
Based on the discussions, it has been identified that both Oliver and Emma must develop a business structure for attaining success. The case reflected that Oliver and Emma want to develop cloud-based solutions for the consumers. Hence, they must focus on the cloud computing along with its process. Additionally, the cloud is a technology, which provides storage services. In this case, they must include certain services in their portals such as pay-per-use, permanent network access, on-demand self-service, pooling, and sharing of resources. Through these services, the customers within the market will get attracted and join the service of Oliver and Emma. Simultaneously, they must introduce a hybrid cloud system so that the customers can access their own storage system. With respect to the software, Emma and Oliver will use Google drive, Zoho Office Suite, and Microsoft Office 365 to provide solutions to the customers. The aforementioned software is the easiest and low-cost technologies, which assist the company in gaining expected profitability in the initial stage of business.
Not only the above-mentioned factors, but Oliver and Emma must also focus on other aspects for developing the business structure. Mainly two factors are identified for their business structure in which one is the business factors and the other is a legal factor. With respect to the business factors, they must focus the initial business cost and its benefits. After the identification of cost factors, they must focus on the security risks as well as its prevention. As they will provide a cloud solution to the clients, hence they may face cyber threats in the future. Thus, due to this reason, they must focus on the security risks and its prevention. Besides, Oliver and Emma will need a workforce structure for developing organisational productivity s profitability. Therefore, they must develop an organisational structure, wherein Oliver and Emma will work as Chief Information Officer (CIO). Under this, the information management team will work, which will be used to connect the client and cloud maintenance. Under this team, various architectures will work to maintain the infrastructure of the cloud base. This is the organisational structure, which can be followed by Oliver and Emma to develop their organisation.
With respect to legal factors, they must focus on certain laws such as Australian Consumer Law and Fair Trading Act 2012 and The Australian Consumer Law among others. It will help the company in providing quality service at an affordable price. On the other hand, Emma is unknown about Oliver’s imprisonment with respect to funding appropriation. Hence, it can lead to causing a legal issue in the future. On the other hand, Oliver also has no idea regarding Emma’s increasing personal debt and two of the creditors sending her letter of demand relating to the same. Based on this situation, it can be claimed that it can create issues in the future. For this reason, both partners must confess their problems and make a mutual and legal agreement towards the business. Only this can assist them to establish a proper organisational structure, which will provide benefits within the operating market. Therefore, it can be stated that Oliver and Emma must focus on both business factors and the legal factors to make a successful business.
In addition, Oliver and Emma must develop an internal environment prior to receiving success within the market. Therefore, they must focus on the organisational culture and leadership. Fundamentally, three types of culture has been identified, which are customer focused culture, collaborative culture, and Agile-based culture. Through these cultures, the company will able to develop a proper structure for the organisation. Each employee will be able to work efficiently through these cultures. Simultaneously, six major aspects must be implemented for the purpose of conducting a proper business operation. These include active sponsorship to attract customers, distributing product information within the market, proper internal as well as external communication, behaviour, establishing effective cloud base ecosystems, and developing a plan to execute a task. By following these above-mentioned processes, the organisation will able to create a business structure, wherein the customers can easily connect with the organisation. At the same time, Oliver and Emma will able to provide the required service on time. However, customer’s relationship is one of the major factors due to the fact that the organisation will establish the structure as per the consumer need. In the initial stage of business, only customer satisfaction will lead the organisation towards market success.
References
Kiryakova, Gabriela, Lina Yordanova and Nadezhda Angelova, ‘Application of Cloud Computing Services in Business’ (2016) 13(1) Trakia Journal of Sciences 392-396
Mcknight, Harrison and Norman L. Chervany, ‘The Meanings of Trust’ (2014). University of Minnesota 43-45
McQuaid, Ronald W., ‘The Theory Of Partnership – Why Have Partnerships?’(2016) Managing Public-Private Partnerships for Public Services: An International Perspective 3
Mukherjee, Ananya Reed and Darryl Reed, ‘Partnerships for Development: Four Models of Business Involvement’ (2014) Journal of Business Ethics 14
Australian Consumer Law and Fair Trading Act 2012
Superannuation Industry (Supervision) Act 1993 (Cth)
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