Starting up a Business

Starting up a Business

Part A



[Mr. Damien Smith]

[Client's Address]

By Email: [Client's E-mail Address]

Dear Mr, Smith,

YOUR PROPOSED START UP RESTAURANT BUSINESS

We appreciate your decision to select us to act for you while you are starting up your business. We have given a description on the legal issues pertaining to the business structure. We hope that by following our recommendations, you will be better able to form your business. Enclosed is an agreement of the fees we are charging for this service in accordance with the Legal Profession Act 2004 (NSW).

1. Introduction

Our general responsibility is to advice the client on the legal issues that he will face while opening up his business. Recommendations will be made about the financial transactions involved and responsibilities that will have to be met. Our service does not include advice on the viability of the business commercially or financially. Therefore it is your responsibility to assign a professional in order to verify the commercial and financial viability of the proposed business, its competitors, profitability, and location.

2. Proper Maintenance of Accounts

Proper books of account need to be maintained by the company in accordance to the Companies Act 2001 and the owner is responsible for any errors in the books of account (Mitchell, 2011). Therefore, it is the responsible of the owner to ensure that the accountant is performing his duties responsibly and is not taking any unfair advantage of his position. Although the accountant is responsible for preparing the accounts, in case of any discrepancies, the directors are held responsible.

The accounts should be maintained in a way that information could be retrieved from them whenever needed. The income statements and balance sheets should be produced at least every half or quarter of the year. After drafting the reports, they should be audited by a professional audit team in order to determine its accuracy.

3. Disclosure

It is the responsibility of the company to perform its task in a respectful manner and disclose its business to the authorities in accordance to the law (Nolan, 1996). This is done in order to ensure that the company is conducting its business in a true and fair manner and is not in any way affecting the interests of the state or the community.

The details of the business structure may not be disclosed in order to maintain a competitive edge, but the business that the company is conducting should be made available to the authorities. The audited financial statements should able be made available in order to prove that the business is being conducted ethically.

One important aspect that needs to be properly disclosed is its asset structure. Assets are something that can easily be misrepresented by adjusting the depreciation. Therefore, it is the duty if the owner to ensure that the figures shown are true and fair.

4. Taxation

It is the responsibility of the business to pay taxes whenever they are due. We cannot guide the business on the tax structure or the mode of payment. All we can guide you is to ensure ...