I have just met with a new client, Claudia Lovely. Claudia intends to set up a business providing a unique after-school care program for primary school aged- students which involves teaching them about science, technology, engineering, art and management (STEAM) concepts in a fun and hands-on way. Claudia seeks advice on potential business structures she could use to run her business as well intellectual property protection she will require. She intends to call herself 'GENIUZ STEAM Kids' and has developed her own unique logo. She wants to promote herself on social media via catchy slogans and tunes as well. She has been doing extensive research in the past couple of months regarding her business model and has developed her own unique teaching methodology as well as teaching materials. Claudia intends to have three different centres and hence wishes to purchase at least two office spaces (which she will use to run her business from) and a fleet of vans to transport school kids to and from school. She estimates this will cost approximately $800,000. She further intends to hire staff to support the anticipated increase in workload. Claudia has big ideas for her business and she believes she will need to borrow money to fund future expansion plans and is concerned that she may not meet the required lending and servicing requirements due to insufficient insecurity available for any bank loans she wants to take out. Claudia owns a house, with $200,000 worth of equity and has $100,000 in savings. She further does not want to give up control of the day-to-day operations of her business, but would consider sharing ownership with business with others if they contribute capital. She has two friends (Tara and Greg) who are interested in being part of her business. Tara and Greg both have extensive industry experience in the after school program industry but Claudia is concerned with the number of failed businesses Greg has been involved in. In conversations with Claudia, it transpires that Tara and Greg can each provide $250,000 and Claudia the remaining balance.

b) Advise Claudia on at least three ways to structure her business, including the strengths and weaknesses of each option for her specific circumstances. Please remember to address the specific needs and concerns for the client as well as her specific assets and liabilities when giving advice. Please address the suitability of each business structure in IRAC format. In your answer, remember to refer to specific sections of relevant legislation and case law in your answer. (24 marks)

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