Question 2

We are now 10^th August 2020, and the dispute over Numbers R' US is now settled. The ads from Sparkling Ads are proving very good and customers are rushing in. The firm keeps on growing. Their revenue is now reaching $49 million. They have had to employ many more employees. The works force is now 150 employees. Tom and Michael are wondering whether it is time to change business structure. They will be happy to provide the capital but as the dispute with Sparkling Ads has shown, they are currently very vulnerable.They have the following requirements:

1.They want to minimise their income tax.

2.They want to be able to protect assets. They have recently bought a new office space and upgraded their offices to the new brand new fully furnished floor in an office tower on Grenfell Street.The total of their gross assets is $10 million.

3.As the profits grow, they want to be sure the profits can be retained for business development and further expansion.

A.What business structure would you recommend? What would be the advantages and disadvantages of relevant business structures in this context? (10 marks)

On 26^th August 2020, Numbers R'Us is incorporated. The same day, Chidi come into the office and is hit by an office trolley full of new computer equipment. He falls to the floor and his leg is badly injured. He will require surgery and rehabilitation.

B.Is Chidi entitled to worker's compensation?Justify your answer.(5 marks)