Three small business operators, Alan, Bob and Charlie, are in discussion about which business organisation is the best: sole trading enterprise, partnership or proprietary limited company.
Alan, a sole trader, argues that the sole trading enterprise has the edge over the others because of its simplicity and ease of formation. Bob, a partner, argues that a partnership is the best because of its low level of formality and relative privacy. Charlie, a company shareholder, argues that a proprietary limited company is by far the best of the three because of the benefits of limitation of liability and the fact that such organisations are separate legal entities.
With the scenario above in mind, critically examine the comparative strengths and weaknesses of the three forms of business organisation noted above. Your discussion should extend to a wide range of differences amongst the organisational forms, and not just the matters raised by Alan, Bob and Charlie. Who has the strongest case – Alan, Bob or Charlie?
Wherever possible, you should use Corporations Act section numbers and case authorities to support your discussions and arguments, and if possible illustrate with examples of contemporary cases before the courts. You should use a range of secondary authorities (books and articles), consistent in number and quality with a post graduate university essay, and duly acknowledged with proper referencing to support your assertions and arguments.