Assignment
Students will be required to conduct research, to understand and analyse the law and to structure an argument in relation to a particular aspect of the law.
Topic:
Alana, Eliza and Ellie met at school. They operate a business together in Franklinford, a small community in the Central Highlands of Victoria.
The business operates under the registered business name ‘Ruby Field' which they discovered on a ‘hipster' business name generator.
In the business, the three women custom design and construct ‘tiny houses' which are small houses built on the back of trailers. Clients (i.e. prospective tiny house purchasers) only have to register the houses as motor vehicles and then they are free to park and live wherever they can find a landowner willing to have them on their property. Alana's Uncle Ralph refers to the tiny houses as ‘fancy caravans' but the women cannot bear to hear this description of their products.
The business model works as follows:
- Clients (who can be situated anywhere in Australia) make a selection from one of four basic plans.
- Each client then works with Eliza to customise the basic plan to their own requirements. Eliza develops a detailed design specification including fit-out and furnishings.
- Alana then costs the project according to the design specification and provides a quote to the client.
- The client then signs a contract and pays a 20% cash deposit.
- Ellie and her build team construct the tiny house in accordance with the design specification.
- Once the tiny house has been constructed, the client either calls to collect the tiny house or Ruby Field will arrange delivery for an additional fee.
- The full price of the house must be paid before delivery.
- Clients have 14 days to report any problems with the house (in writing) and Ruby Field have a further 30 days to rectify.
Since it started, the business has operated from a shed on Uncle Ralph's property (now known as Ruby Field). No amount of rent has been agreed or paid as Ralph wanted to help out the women. But now that the business is growing, the women want arrangements to be more formal.
The build team consists of two carpenters, Rick and Samantha. They are considered by Alana, Eliza and Ellie to be independent contractors.
All materials, furniture and furnishings are suppled on credit by businesses in the local area.
The tiny houses are in great demand and the business is growing. However, changes will have to occur to allow the business to expand.
Required:
Identify three significant decisions you think Alana, Eliza and Ellie will have to make in order to grow their business and whether a partnership or a company would be a better business structure now that the business is established.