This report is aim to advice Sheldon around the best business structure for his business called Australian agricultural services. There are six types of business structures under Australian Law, including associations, joint venture, trust, sole trader, partnership and companies. The report briefly explains the reasons for abandoning associations, trust and joint venture and focuses on the advantages and disadvantages of applying sole trader, partnership and companies. Overall, the report provides the best business structure to Sheldon.

Associations, joint venture, trust

Associations are the business structure for not-for-profit activities (such as sporting or community services groups), which can be divided into unincorporated and incorporated associations. Sheldon’s business is created to make profit. That is to say the associations are irrespective in Sheldon’s case.

Joint venture is simply a contractual arrangement between two or more people that they will cooperate to conduct a particular venture or related ventures in a relatively specific period of time. While in Sheldon’s case, it is more appropriate to create a long-lasting relationship, which means joint ventures are excluded.

Trust is a separation of legal ownership of assets (Trustee) from beneficial rights (Beneficiaries) attached to assets. In Sheldon’s case, the new piece of machinery developed by Sheldon which will revolutionise farming practices is the assets which could be generate beneficial right to the beneficiaries, while Sheldon is still using this assets means there is no separation of the ownership.

Sole trader

Sole trader is used to describe the situation where an individual person carries on a business in his own name. If Sheldon applies a sole trader to run business, there is no separation between the business and his own assets or obligations of Sheldon conducting