George & Malissa are siblings who came to Australia from Israel as international students 10 years ago. They used some of their inheritance money after both of their parents died to fund their education. They still have $500,000 left from their inheritance and would like to use a large portion of it to create their dream business. They have decided to call their business Roohealth. They have come to you for advice on how to best structure their business. Both of them are very conservative, not wanting to waste their inheritance, and not prepared to borrow It is intended that George will take on the management of the business and Malissa will be in charge of marketing. They will both be involved in product development. As they would both be giving up secure jobs, they will need to be paid from the business in order to meet their living needs. Their wish is to partner with indigenous communities and small farmers to source native Australian plants to make teas and other associated products that marry the traditional medicinal use of native Australian plants with scientific research. They want to operate only from a few strategic stores but mainly sell wholesale and online.

They have contacted you for advice as to what structure they should start their business in. They are aware they can use any of the following:

a) trust

b) partnership

c) sole trader

d) company

e) superannuation fund

They specifically want a structure that will:

a) be flexible enough to allow them to grow.

b) be tax effective,

c) provide them with appropriate asset protection to deal with legal liability, and

d) allow them to draw funds to live on.

Requirement

You need to analyse each of the potential structures against their criteria and provide a recommendation of the appropriate structure for the Roohealth business in the form of letter.