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Greenacres Realty Case Study

Essay by review  •  November 2, 2010  •  Case Study  •  2,775 Words (12 Pages)  •  1,085 Views

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TABLE OF CONTENTS

TITLE PAGE.......................................................................................2

EXECUTIVE SUMMARY........................................................................3

BUSINESS OWNERSHIP........................................................................3

FINANCING........................................................................................4

MARKETING.......................................................................................5

CONCLUSIONS/

RECCOMENDAITONS...........................................................................10

BIBLIOGRAPHY...................................................................................11

APENCICES

APPENDIX I........................................................................................12

APPENDIX II.......................................................................................18

APPENDIX III.......................................................................................23

APPENDIX IV.......................................................................................27

APPENDIX V.......................................................................................28

Proposal for:

"GREENACRES REALTY"

Compiled by BALENTINE SOLUTIONS.

01/03/05

The purpose of this proposal is to provide in depth information, research and knowledge of several different approaches that can be taken into account when deciding on what avenue to pursue for "Greenacres Realty". Balentine Solutions trusts that once this proposal has been explored, you will be able to come to a concise decision and your business will be ready for existence.

BUSINESS OWNERSHIP

There are two possibilities of business ownership and structure that must be considered for Greenacres realty, they are:

1. PARTNERSHIP

Partnerships are simple and relatively inexpensive to establish. They can be made up of a minimum of two and a maximum of 20 members. The ability to raise capital becomes somewhat easier with there being a wider choice from personal sources and financial services. Everyone involved brings with them an area of expertise and the business can be sub-divided into specialization. The work load is shared. Partners decide on how profits and/or debts are to be distributed and a contract is drawn up outlining such issues before the business is started, this ensures everyone's protection. Although a contract is drawn up it must also be understood that partnerships do not have limited liability, thus, if one or more partners are not able to pay a debt, die or decide to break the partnership agreement, it is left upon the shoulders of the remaining members to cover any incurred costs. A partnership does not pay income tax .Each partner records their share of the profit/loss on their individual tax return, however, a separate income tax return must be lodged to report the income of the partnership.

Tax return from for partnership see appendix I

Partnership agreement see appendix II

When deciding on whether to enter into a partnership you must thoroughly converse with one another and ensure that everyone agrees with how the proposed running of the business is to occur.

Outlining the responsibilities of each partner would be of wise consideration so that everyone is aware of their involvement within the business.

It must be stipulated that personal issues and personality clashes can be serious in the demise of a partnership. Do take this into account.

2. PRIVATE COMPANY

Private companies are separate

legal entities and have a limited liability, they are made up of at least one to a maximum of 50 members. There is safety to members in regards to debts, you will only pay the amount equivalent to your share in the company.

To exist as a company a director, a member and a secretary are needed. This decision can be based on areas of expertise. As a private company Greenacres Realty will not be listed on the ASX and no shares will be offered to the public.

A private company must submit an annual report of their full financial records to the Security commission.

Tax return form for company and company number see appendix III

FINANCING

Due to the nature in which the finance is needed the best option is apply for a bank overdraft, business line of credit and business loan.

Intrest rates are very competitive and it wise to shop around in order to find what in right for your businesses needs.

The below is a table comparing factors of different lending institutions for the amount of $30000

INSTITUTION

COMMONWEALTH

Fixed better business loan WESTPAC

Business development loan fixed rate SAVINGS AND LOANS

Business latitude loan and overdraft ANZ

INTEREST RATE Loan Term Interest Rate

1 year 7.55% p.a.

2 year 7.55% p.a.

3 year 7.60% p.a

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