Tanya has just been offered a retirement package from her work as a sales representative with Miracle Make-up. Her long-term goal has been to start up a day spa resort on the east coast of Victoria with her sister Jacquie, who is a marketing consultant. Tanya has also been dreaming of joining the 'sea change' set. A suitable building has become available at Lakes Entrance, Victoria. With their husbands (Clim, who is a builder and Ian, who is a plumber), they decide to sell up their homes in the Melbourne and purchase this rundown building. They think the potential for the business venture is enormous, but expect that additional capital will be required over the next five years for their dreams to be realised
Required
a. Do you think the two families have the necessary skills between them to run such a demanding venture? List the skills that you think are important.
b. Go to the business.gov.au website. Click on 'Thinking of starting a business' and then? Which business structures should I choose'. Compare and contrast the income tax issues associated with the partnership and company forms of business structure.
c. The families have decided to set up a partnership. Do you think that this is the right decision, or do you think the company structure would be a better option? Why?
d. Do you think their bank would be happier to lend them finance to expand, due to the fact that they are in partnership? Why?