Question:
Discuss about the Australian Corporate Law.
There are different businesses opened up by various individuals and their primary goal is to ensure customer satisfaction and generate income. The choice of a business depends on an individual and the availability of the clients. The employees employed in the organizations should be treated with dignity for them to continue working as required. Moreover, the managers should motivate them from time to time for them to gain the morale to work. The productivity of a business depends on the workers effort and the management commitment to the organization. The marketing of the products and services is also essential so as to create awareness to the public. The employees have their rights and they should not be mistreated by the employers at any time. The salaries should be paid as agreed and the working environment should also be friendly to enable them to perform their tasks. The discussion below outlines the business structures and employee rights.
Moreover, Kate owns a business of selling women’s shoes and is growing rapidly as it is becoming more successful. She is a sole trader and needs to update her business structure to a more appropriate one. Kate has been doing all the activities on herself without any other persons help. As a sole proprietor she has been enjoying all the profits alone as she manages the enterprise alone. The losses in the business it is upon her to know when to recover them and also minimize them and continue running the business. There are no documents that are needed for one to engage in sole proprietorship structure. It is the responsibility of Kate to take care of any liabilities that arises while carrying out the business. The best structure for Kate to upgrade the business to is the partnership. She will be required to partner with an individual or another organization so that they can undertake the business together. However, each partner will have the responsibility of reporting their share of the enterprise profits. The individuals will also be liable for the debts or other liabilities that the business will be responsible for from time to time (Spadaccini, 2007).
In addition to that, there are a number of advantages and disadvantages of the partnership structure. First of all, there is more capital to run the business as each of the partners will contribute an amount of cash. It will be easy to buy the stock for the enterprise and also expand it to have other branches to serve the customers. Secondly, the decision making will be easier as the individuals will come with various ways to improve the business. It is because two heads or more are better than one in coming up with a solution towards something. The primary goal of the persons will be to come up with ways that will enable the company to earn more profits so that when shared on can get a big value. The strategies will be laid down to enable the organization to achieve its goals and objectives. Thirdly, the profits obtained from the business are divided among the partners. It is carried out after all the enterprise stock is bought and money for other activities is set aside (Smith, 2013).
Fourthly, the management of the business is easier as all the persons help in managing all the activities. The individuals are allocated duties and responsibilities that they should perform. It makes it easy to organize the enterprise and its employees who help in various activities. Moreover, there are no shareholders who can interfere with the governing the business. The management is highly flexible as long as all the partners agree on the same thing that needs to be undertaken. The fifth is that there is the shared responsibility of managing the business and one takes part in perfecting the area they are best in or where they are talented. The partners have various skills that are of help in the organization formed and they will be highly beneficial to the business (Cockburn, 2011).
However, there are disadvantages of the partnership form of business structure. First of all, there are disagreements between the partners. It occurs when the individuals have different ideas on running the business or other interests. They highly cause harm to the businesses and also the relationship among the persons. It is advisable that the people involved should draft a deed of partnership while engaging in the partnership. It ensures that every individual is aware of the procedures that will take place during the disagreements and what will happen if the agreement is dissolved. Secondly, there are issues during the profit sharing where some partners are not putting any effort in running or managing the business. Most of the people are reluctant and only wait to reap the rewards after others have worked hard. All the persons involved are supposed to work together and show commitment to the work. Thirdly, the partners must pay the taxes as required by the law and the returns should be done yearly. It is not different to the sole trader and the taxation laws are well stipulated and must be followed. Fourthly, all the partners share the liability and other financial risks of the enterprise. They are not subjected to a particular person and all the people must be accountable. The circumstances are sometimes not liked by many persons. Lastly, the agreements set must be followed and no one has the freedom to do what they want like in a sole trader structure (Spadaccini, 2007).
On the other hand, Myra is the director of Kids Clothes Pty Ltd and the only shareholder and the organization makes cheap children clothing. It has been profitable in the past but later on started running at a loss. She later paid herself huge bonuses and transferred the other assets to a new company known as Clothing for Kids Pty Ltd. The workers are still employed by Kids Clothes and it has no any assets. It owes them some thousand dollars; superannuation and long service leave rights. The employees have possible legal grounds that they can use to claim their entitlements from the Clothing Kids Pty Ltd. First of all, they had been employed by Myra and signed the contract form that outlined their duties and salary amount. Moreover, it includes the right to leave over a period of time while working in the organization. The contract form will be useful at the court of law to show the agreement they had entered into with Kids Clothes Pty Ltd (Werhane et al, 2004).
Secondly, their employer transferred all the assets to the Clothing for Kids Pty Ltd that were being utilized in the Kids Clothes. They have the right to claim as they had worked hard to accumulate the assets and their rights have not been addressed. The management of Clothing for Kids Pty Ltd is responsible to settle what the Kids Clothes owes its employees. The assets should be utilized in paying the debts that the Kids Clothes never paid its workers. Moreover, they should also get the superannuation and the long service leave. The law stipulates the rights of the employees and they are entitled to leave and the regular payment towards future pension. The assets transferred to the other company are highly valuable to the employees and they have the right to use them. The managers of Clothing for Kids Pty Ltd should recognize the efforts of the workers and grant them their entitlements. They should also have enquired whether the Kids Clothes had any debts with the workers or any people before accepting the assets. It is against the law to accept valuables that have disputes among other parties. The requests of the employees should be addressed by the Clothing For Kids Pty Ltd (Repa & Nolo Press, 2014).
Moreover, action should be taken against Myra personally for her misconduct. She neglected her duties as the director and did adhere to the employee rights. On the other hand, she transferred all the organization assets to another company without any formal notice to the workers. She would have informed them about the progress of the business and the changes taking place. Myra also owes them thousands of dollars that had accumulated over the holiday. They had also been granted the superannuation and long service leave as required by the law. She had violated the law and must face various charges at the court of law (Busse, 2004).
Conclusion
In conclusion, the rights of the employees are protected by the law and no any employer should go against them. They should adhere to them to avoid any complications or fines at the court of law. The workers should sue Myra at the court of law for her negligence and not performing her duties as required by law. She contravened the Corporations Act that outlines the duties and responsibilities of the directors of companies. Myra is liable for the activities that happen in the company and should act accordingly to solve the issues affecting the workers who she relies on to improve the organization. The employees should be highly treated with respect and dignity as they play a major role in a company. They help in improving the productivity and generating income for an organization.
References
Busse, R. C. (2004). Employees’ rights: Your practical handbook to workplace law. Naperville, Ill: Sphinx Pub.
Campbell, D., & Campbell, C. T. (2009). Legal aspects of doing business in North America. Salzburg, Austria: Yorkhill Law Publishing.
Cockburn, R. (2011). Small business tax planning: All you need to know from start-up to retirement. Petersfield : Harriman House
Gray, D. A. (2004). Start & run a profitable business. London: Kogan Page.
Lewis, J. (2008). Seeking inner peace and financial freedom: Stepping stones in a chaotic world. New York: iUniverse.
Mancuso, A. (2015). How to form your own California corporation. Berkeley, California : Nolo
McCulloch, K. J., & Prentice-Hall, Inc. (2002). Termination of employment: Employer and employee rights. Englewood Cliffs, N.J: Prentice-Hall.
Orakwue, O. (2007). Two dozen businesses you can start and run in Canada, the USA and elsewhere. Toronto: Obrake Books.
Repa, B. K., & Nolo Press. (2014). Your rights in the workplace. Berkeley, California : Nolo
Spadaccini, M. (2007). Business structures. Irvine, CA: Entrepreneur Press.
Smith, H. (2013). Learn small business start-up in 7 days. Richmond, Vic: Wiley.
Werhane, P. H., Radin, T. J., Bowie, N. E., & Wiley InterScience (Online service). (2004). Employment and employee rights. Malden, MA: Blackwell Pub.
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