Business Education Assignment Answer




            Before making a decision to start a business, it is ideal to get a business advice so as to avoid all the problems or challenges that might come up as you start the business.  Most reasons of failed businesses, it that they do not get the needed information before they start them.[1] Some of the key issues that should be considered before starting a business are: the financial aspects of the business such as the sources of funds, the creditors among others, the employees, the sustainability of the business, the location, the macro and micro elements that affect the business, the business environment itself and the consumer or customer behaviour of the services and the products that you sale or offer. The following paper is therefore going to show how to offer advice to a clients before start-up of his/her business.

            According to the Fair Trading Act 1999, the Disposal of Uncollected Goods Act 1961, the Carriers and Innkeepers Act 1958 and the Businesslord and Tenant Act 1958, it is ideal that she is able to understand that the as a caretaker and the owner of the business, it is ideal that she ensures the above law is consider.  As compared to Taxation Ruling 92/3. In TR 92/3, the Commissioner takes the view that the exchange rate is the intentional exchange of money or property without thought. Since the contributor gets no thought, an exchange rate typically does not make wage or pick up to him or her. Exchanges in which a giver gets incomplete thought, notwithstanding, are business with as part exchange rate and part bartering, which might bring about wage or pick up.[2] A current element, the choice to change the business shape and work as an alternate business substance must be dissected to decide the practicality and tax consequences.

            In reference to The Australian Consumer Law and Fair Trading Act 2012, she should be advised that the business must be able to meet the consumer demands and preference as well as the quality of the products must be in order. To begin with, is it even conceivable to get from the present element to the new substance? Whether it is conceivable to change over a current business to another type of substance alludes to the requirement for an empowering statute, a reasonable number of proprietors (two in many states), and the collaboration of loan bosses.[3] A second statute might be required at whatever point the specific type of business being led is confined to particular types of element, for example, the behaviour of callings, for example, law, drug, or open accounting. Additionally, if the business has secured boutique who might question the exchange of benefits, they should be assuaged.

            According to the Income Tax Assessment Act 1936 (Federal Register of Legislation), she should be able to abide by both payment of income tax as well as other public or business taxes that are on board.  The Tax Consequences. With reference to Ferguson v. Federal Commissioner of Taxation [1979] FCA 29. Accepting the practicality prerequisites are met, does it bode well? Do the tax and nontax qualities exceed the tax and nontax expenses of the change? Tax expenses are drastically distinctive for each of the diverse tax substances (Blackshield & Williams, 2010).

            In comparison with FCT v JR Walker (1985) 85 ATC 4179 is important for the business to proper because with the future of plans of making online shops of the products she should make sure to abide with Spam Act 2003, which states that the business should not spam the internet with product information that is unnecessary. A exchange rate property is esteemed as the overabundance of the property is equitable quality (FMV) at the season of the exchange rate over any obligation to which the property is subject. The obligation hindering the property is regarded thought paid to the transferor; along these lines, the giver acknowledges wage to the degree the risk surpasses his or her balanced premise.[4]

            According to Business Services Wage Assessment Tool Payment Scheme (Consequential Amendments) Act 2015 she should ensure that the Internal Revenue Service reminds taxpayers to take after proper rules while figuring out if an action is a business or a pastime, a movement not occupied with for benefit. With a specific end goal to instruct taxpayers in regards to their documenting commitments, this sheet, the eleventh in an arrangement, clarifies the guidelines for figuring out whether a movement qualifies as a business and what restrictions apply if the action is not a business. Inaccurate finding of diversion costs represent a bit of the exaggerated alterations, conclusions, exclusions and credits that signify $30 billion every year in unpaid taxes, as indicated by IRS gauges.

            In reference to Commonwealth Securities and Investment Legislation Amendment Act 2008, it is clear that the new business must be able to meet the needs of the securities and investment laws.  When all is said in done, taxpayers might deduct customary and vital costs for directing an exchange or business. A conventional cost is a cost that is normal and acknowledged in the taxpayer’s exchange or business. An important cost is one that is fitting for the business. By and large, an action qualifies as a business on the off chance that it is gone ahead with the sensible desire of winning a benefit.



With a specific end goal to make this determination, taxpayers ought to consider the accompanying components:

Does the time and exertion put into the movement demonstrate an expectation to make a benefit?

Does the taxpayer rely on upon pay from the action?

Could the taxpayer hope to make a benefit later on from the valuation for resources utilized as a part of the movement?

            The IRS presumes that an action is carried on for benefit in the event that it makes a benefit amid no less than three of the last five tax years, including the present year — no less than two of the most recent seven years for exercises that comprise principally of rearing, appearing, preparing or dashing steeds.

            In the event that an action is not revenue driven, misfortunes from that movement may not be utilized to counterbalance other salary. A movement delivers a misfortune when related costs surpass wage. The point of confinement on not-revenue driven misfortunes applies to people, associations, bequests, trusts, and S organizations. It doesn’t have any significant bearing to companies other than S organizations.

            It can be recommended that the business cannot be determined as an ordinary income under section 15-15 of the income task assessment of 1997 because the property was sold after 20th September 1985.   The law clearly states that section 15-15 does not apply if the profit from the sale a property acquired on or after 20 September 1985. This leaves the sale of the property to be determine or considered under section 6-5 of the same act. Under section 6-5(1) it is clear that the sale of $650 of the property is considered ordinary because it falls under income from sale of property.


Taxation Example

Cost base of the business

450,000 less interest rates of 150,000; it is considered that Alex used the business for income hence the interest will be deducted from the cost of the business hence the cost base is 300,000

Capital Gain on House

Selling price of the house less the buying costs (plus) other expenses.

450,000- (Value for house; 450,000-150,000)

Capital Gain is 300,000


The law and section of Income tax assessment of 1991 states that “All assets you’ve acquired since tax on capital gains started (on 20 September 1985) are subject to CGT unless specifically excluded” hence costs of construction were exempted as well as the valuation cost

Cost Base of the Property is 450,000 less 600,000 exemptions made to all the interests and expenses after 20 September 1985. CB is therefore, $150,000.



Business like boutique are being faced with ethical problems in the past decades. The boutique have been trying to ensure that the stakeholders have increased dividends as well as maximized profits; as a result, they have ended up with ethical dilemmas. It is clear that the boutique have no reasons for that, but a cab only accounts the profits they have made in each financial year. The business owner, as well as the boutique employees, are on the pressure that they should be able to meet the needs and demands of the customers making it hard to meet ethical needs and demands. The measure of success of boutique have been only on the improvement of the bank’s assets as well as maximization of profits. Government as well as boutique watchdogs have failed to identify the ethical issues that boutique are facing at the moment, in the past as well as they expect to the same happen in the future.

[1] Butt, Adam. “Student views on the use of a flipped classroom approach: Evidence from Australia.” Business Education & Accreditation 6, no. 1 (2014): 33.

[2] Harmer, Jeff, John Piggott, Heather Ridout, and Greg Smith. Australia’s future tax system. Commonwealth of Australia, Department of Treasury, 2010.

[3] World Bank Group, ed. Doing Business 2014: understanding regulations for small and medium-size enterprises. World Bank Publications, 2013.

[4] Hogan, Lindsay, and Rebecca McCallum. “Non-renewable resource taxation in Australia.” ABARE Report, April, Commonwealth of Australia, Canberra (2010).