BUSINESS LAW IN AUSTRALIA

QUESTION

SOLUTION

Australian Business Accountancy (CPA)

Australian Business Accountancy is established as an independent Company as CPA (Certified Practicing accountant) by Mr. A, B and C. All are with the company and the office of the company is in New South Wales. Our Company is established under the joint venture. Where Mr. A B and C are the joint share holders and are equally responsible for the company.  A business enterprise in Australia may be established by individuals, a trust, and partnership or through joint venture. [Australian trade commission, 2011] Any company which has its registered office in Australia has to carry out its business or work in Australia. Our business is also in Australia for the help of people in manner of protecting their assets and minimizing the taxations. In every case it has to be registered as an Australian Company under the ASIC (Australian Security and Investment commission) and must be governed by Corporations Act 2001. In Order to register a company you have to register your Company or business name, your domain name and in some cases you have to take license from the authorities to carry on that business. [Live in Australia.com, 2012] Our company name i.e. Australian Business Accountancy has been entered in the national name index of the ASIC, you can find it by simply checking the list without any cost. Our Goal is to help and assist our client with our practical experience and best knowledge of company Law and taxation laws of Australia.

Our Business Structure

Our business structure is of a Company registered under ASIC. Choosing a business structure is very important for everyone before starting the business. They may be of sole traders, partnership, a trust or Company. For any Company like us it has to apply for the registration, then they will be given identification number by ASIC. For registration, every company which is to be registered has to ensure the availability of the domain name. By non-availability, it means that if the name is already taken by some other company you will not get that. After the availability of business name the company has to proceed for the submission of all required documents. After completion of the formalities you will get ABN (Australian Business Number). It is a unique identification number which should be of 11 digits and is to be used in carrying out business with others. By having this ABN there are other benefits also. Such as, you can claim for GST credits and fuel tax credits. It also helps in the easy flow of your business and dealing with tax office and governmental agencies and departments. In other words we can say that having a ABN is the first step for the starting of your business.

After applying for the ABN, all our business details become the part of the Australian Business register.

Our company

Our company is a propriety company with all three of us working as directors of the company with few employees. A propriety company is a company which is registered as a propriety company under the Corporations Act 2001. A propriety company must be limited by the shares and unlimited with share capital. Also it’s a limited liability company where the shareholders are only liable as per their shares in the capital of the company.

Registration process of a propriety company

First, one should have to lodge an application under ASIC. The application must clearly specify few things such as the type of company, the name of the company, the name and address of the persons who consent to become the member of the company. Also, the proposed address should be given where the registered office of the Company is going to be established. For the public company limited by share and unlimited share, all the particulars about the share must be mentioned. [Corporations Act 2001]

After all the formalities, and application under section 117 of the Act, the ASIC may issue certificate which includes, the name of the company, its member, its type and gives ACN number. After registration the company comes into existence and it is the duty of the ASIC to watch the activities of the company.

Advantages of our business structure

We believe that our company, The Australian Business Accountancy is the most appropriate business firm for the low budget client. The real essence of our business is to help the client not to trouble them with all legal complexities. Being a small business firm people can approach us easily and get the assistance. We work with the most eminent and experienced accountants. There is no time wasting and unnecessarily expenses. In all it’s our clients comfort that is our goal and advantage of our structure. With low staff turnover we maintain the quality of the work and try to assist people with the experienced accountant as our employees. There is no bulk of registers and the book keepers which can result in red tapism. With the changing laws on taxation, you have to be up to date regarding all; hence we all hold a good grasp on the changing laws and issues like this which may influence our business. Lastly, the advantage of our business structure is that we are close to the many governmental authorities, which helps us to be in touch of all the legislations and better understanding of all of them for our flawless work.

Accounting regulations in Australia

The accounting practices evolve in Australia just to meet the need of society to have a record on the transactions involving money. Hence the rules were adopted for the accounting purpose known as GAAP (General accepted accounting principles). Since 1960 due to the increasing trade practices in Australia it was realized that just generally accepted rules will not be enough it must have the legal effect. Such regulation is important because the economy of any country depends upon the business transactions. The investors in these transactions are only concerned with the money but not the management. The growing complexities in the business resulted in the accounting practice.

In Jan 2005, Australia adopted International Accounting Standards. This was re issued as Australian accounting standard Board (AASB). AASB is an independent governmental agency which regulates the financial accountancy for private and public companies.  The legal effect is given by the most celebrated Act of 2001, i.e. under Section 296 of Corporations Act 2001 and compliance through ASIC (Australian Securities & Investment Committee). The role of AASB is set out in ASIC. ASIC helps in enforcing the corporations and consumer laws for the investors across Australia. Their aims are to minimize fraud and unfair accounting practices and builds confidence among the investors. In Australia FRC (Financial reporting Council) is the agency responsible for the reporting of the accountancy and given advise and report to the ministers. [Accounting Regulations in Australia, n.d]

Our business Premises

With all the experienced and knowledgeable employees we deal with our clients very closely. We share a unique relationship. In our business we basically deal with the tax laws for the exemption of tax and tax returns filed by our clients and also the service of accountancy.  It’s the advantage of our business structure that our company can pay dividends to the shareholders and it can be served as tax credits.

Tax system

In the area of taxation, we have to deal with the changing taxation laws of Australia. All of our partners have deep rooted knowledge of the basic taxation system in Australia. Taxation laws in Australian are similar to that of United Kingdom as Australia signed its first treaty on accountancy with UK. In order to deal with the tax system company has to submit different reports and forms with the tax office and ATO (Australian Taxation officer) governs all kind of taxes such as Income tax and GST.

There are various kinds of taxes apply on business and individuals in Australia. These are:

• Income tax
• Goods and Service Tax
• Medicare Levy
• Fringe Benefit Tax
• Capitals gain Tax
• PAYG withholdings [CDTL, n.d]

In Australia every tax payer has to lodge Income tax return to the ATO before the financial year which starts from 1^st July to 30^th June. For companies with profits has to pay a flat 30% of their profit. The individual tax payers have o pay the Medicare levy of 1.5%. GST is of 10% on all transferable goods and service as well. FBT is the Tax on business which gives benefits to their employees also. Here the minimum rate of tax is 45.6% in Australia.

Like ABN, all the businesses dealing with Australian taxing system has to get a TFN (Tax File Number) from the ATO after submission of the forms reporting all details of  incorporations of the company.

All the taxpayers of Australia whether an individual or the businesses has to pay the tax. As it is a complicated system and ever changing too. We the Business accounting company assures you for the assistance in the taxpaying process and all financial accountings.

References

1. 1.     Australian Trade commission, 2011, Structures for establishing a business in Australia, viewed on 3^rd April 2012, http://www.austrade.gov.au/ArticleDocuments/1358/Structures-for-Establishing-a-business-guide.pdf.aspx
2. 2.     Live in Australia.com, 2010, Establishing a Business in Australia, viewed on 3^rd April 2012, http://www.liveinaustralia.com/business-visa/establishing_business.asp
3. 3.     Corporations Act 2001, Act No. 50 of 2001 as amended, viewed on 3^rd April 2001,http://www.comlaw.gov.au/ComLaw/Legislation/ActCompilation1.nsf/0/CA1F0F9868473141CA256FB9002CA4B2/$file/Corps2001Vol1WD02.pdf
4. 4.     Accounting regulations in Australia, SE n.d, viewed on 4^th April2012, http://www.google.co.in/url?sa=t&rct=j&q=requirements+for+accountancy+bussiness+in+australia&source=web&cd=1&ved=0CD0QFjAA&url=http%3A%2F%2Fwww.treasury.gov.au%2Fdocuments%2F281%2FPDF%2Ffull.pdf&ei=dmN6T-y_J4zJrAexgoz4AQ&usg=AFQjCNFGcITcI2uSINU2poRkb8KVXydvIQ&cad=rja
5. 5.     CDTL, 2012, Australia: Accounting & Taxation, viewed on 4^th April 2012, www.cdtl.com.au
6. 6.     Live in Australia.com, 2010, Taxation in Australia, viewed on 4^th April 2012, http://www.liveinaustralia.com/business-visa/taxation_australia.asp

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