CORPORATIONS LAW ASSIGNMENT: Problem Question

Thomas and Hillary (a married couple) and their children, Jackie and Karl, intend to start a small, boutique hotel under the name 'The Happy Hills'. They plan on converting the large family home (that belongs to Thomas and Hillary as joint tenants) into a hotel for this purpose. The house is their only major asset. All four of them have experience or qualifications in catering and hospitality and feel confident that they will be able to achieve success. However, none of them feel confident that they know enough about the 'legal' or 'business' requirements involved in starting a business and they decide to approach you to obtain some advice in relation to the issues listed below.

Advise them on these issues, taking into consideration their circumstances and requirements, and provide detailed reasons for your advice.

1. They are unsure about what type of structure to use for their business. They are interested in something that

a. would allow them to start small, expand across Australia in a couple of years, and maybe even eventually allow them to list their business;

b. would provide an opportunity for Thomas and Hillary to initially manage the business, while sharing the profit with Jackie and Karl, and in a couple of years when they wish to retire, hand over the reins of the business to Jackie and Karl, but still share in the profit;

c. is sufficiently flexible and easy to manage (to use Thomas's words: 'I want to be able to run the business without tripping over the "legal stuff" everywhere I turn'.)

200 to 300 words required.