Your brief (35 marks)
You are a newly hired junior associate in an accounting and professional services firm that provides business advice to its clients.
Your supervising partner has allocated you a new file to test your knowledge and skills. The partner instructs you to attend a meeting with the clients and then provide him with a report containing advice on the best way forward.
You subsequently arrange and attend a meeting with the new clients, Mr and Mrs Smith, in which they tell you the following information:
• 1 year ago Mrs Smith started a small catering business operating from their home.
• The business initially involved the supply of food to a small regional airline operating from a nearby airport.
• Over the last 6 months they have had offers to expand their business and start supplying food to multiple airlines and from multiple locations.
• To keep up with the demand Mr Smith retired from his previous job and started working with his wife.
• They think their current business structure is basically ‘sole trader’ with all of the contracts in the name of Mrs Smith, but are not sure if they (Mr and Mrs Smith) are actually operating a partnership.
• They have 3 adult children who eventually they would like to bring into the business and hand it over to them when they retire.
• They need advice about the best business structure for their expanding business, and they would like it to be able to provide an easy way to hand over the business to their 3 children who would then have equal say in how to run it.
At the end of the meeting, Mr and Mrs Smith raise the following matters about which they seek your advice:
1. Are they currently operating a sole trade business or is it more like a partnership?
2. Whether the way that they are currently operating the business creates any risks?
3. Whether there is a better way for them to operate the business, and if so, what should they do?
4. What business structure would be best for their business in the future if it continues expanding?
5. What business structure would be the most effective way of being able to ensure that their children can become involved and eventually take over?
When Mr and Mrs Smith leave the conference you return to your office and begin preparing a memorandum for the partner.
In your memorandum to the partner you should address the following issues:
A. How you would characterise the current business structure.
B. What risks are involved in operating the business if it is a sole trader or partnership.
C. What business structure would best suit the expanding business.
D. What business structure would be the most effective way of involving their children and eventually handing it over to them.
In preparing your memorandum make sure to provide reasons for your advice and recommendations, including reference to relevant laws (statutes and cases). You do not have to consider tax advice as part of the memorandum (as tax advice is not part of this course).
Probably the biggest mistake students make in doing assignments is that they don’t study as they would for an exam. Instead, they start by reading the assignment and then try to look up only the parts of the unit that look like they are relevant to the assignment. The trouble is, you cannot say what the relevant parts of the unit are without studying the unit first. In real life you need to understand all the concepts so that you can identify the relevant issues when a client approaches you. So the best preparation for the assignment is simply to study the course properly. Understanding the modules preceding the assignment due date will be sufficient, but you can go beyond that if you wish. You will need a good conceptual understanding of the legal principles before you will be able to determine the appropriate business structure for your client. You will also need a good conceptual understanding to decide what to research and, more importantly, what NOT to research. And you will need a good conceptual understanding to report to your supervising partner.
Clearly, you need to start work on your assignment early. This is not the sort of assignment that you can do within a day or so of the due date.
Written Report to Supervising Partner
The report to the supervising partner must contain three things:
1. The law relevant to the clients’ circumstances. They are making a decision about what business structure to adopt for their business, which may be very different from someone else’s business. You have to work out what is likely to be relevant to them, with regards to the given information. You should also make it clear why it is relevant.
2. Reasoning that weighs up the realistic options open to the client. Not all business structures will make sense for your client, but it is likely that at least one structure with unlimited liability and one limited liability structure will be relevant. The decision of which one to adopt depends on comparing the legal characteristics of each so that you and the client can weigh up.
3. A recommendation and an explanation of why you chose that recommendation. This should flow logically from the weighing up process in 2 above.
Your supervising partner is assumed to be an experienced professional, who probably knows the law you are reporting, although he/she may not know the detail and may not remember case names and section numbers, which you will have to provide in a Reference List. You can therefore speak in technical terms to the partner. The purpose of reporting to your partner is not to teach him/her the law they already know, but to convince them that you have done your research properly and that you have weighed up the alternatives sensibly and come to a sensible recommendation.
The report to the supervising partner should contain the three things listed above. You should also provide a reference list. You can assume that the supervising partner has read the record of the interview with the client, so you will only need to refer to the facts when using them in your reasoning.
What you submit
You need to submit one file including:-
A Title Page – including your name, student number, and word count.
Report – Report to supervising partner (maximum: 1,500 words), plus a Reference List (not included in the word count). (35 marks)
Presentation (5 marks)
A mark between 0 and 5 is available for the professional qualities of your work.
For written presentation, structure and formatting with consistent headings, fonts and page numbering, spell-checking, logical flow of explanations, conciseness, relevance and general readability are all important. Perhaps the key factor in making your report readable is logical flow and relevance, not visual appearance. Your assignment must be expressed in your own words. You will not receive marks for copying slabs of text (even if they are referenced) if there is no genuine attempt to summarise and demonstrate their relevance to the clients’ issues. Referencing must be in accordance with the Guide to Legal Citation linked on the Moodle site. You should only include references in the list that you actually refer to in the report. The Reference List should NOT contain every publication you looked at in your research. Citations in footnotes or endnotes are not included in the word counts, but substantial text in footnotes or endnotes is.
All parts of the assignment will be marked in accordance with the university’s Grades policy. The following marking rubric incorporates that policy.
GRADE MARK CRITERION
HD 85%+ Demonstrates imagination, originality or flair, based on proficiency in all
the learning outcomes of the unit; work is interesting or surprisingly
exciting, challenging, well read or scholarly.
COMMENT: Here, the student will have done everything well, provided
some original insights, and formulated their answer in a tight, efficient,
thoroughly professional manner. The argument for the recommendations in
the report will have a strong logical flow which is supported by the facts
and the research. It will also be convincing, such that a supervising partner would not only embrace the recommendation but also clearly understand why it is being made.
D 75-84% Demonstrates awareness and understanding of deeper and less obvious
aspects of the unit, such as ability to identify and debate critical issues or ideas to new situations, and ability to invent and evaluate new ideas
COMMENT: Similar to a C, but for a D the student has identified issues
specific to the client’s situation that are insightful and not obvious.
C 65-74% Demonstrates ability to use and apply fundamental concepts and skills of
the unit, going beyond mere replication of content knowledge or skill to
show understanding of key ideas, awareness of their relevance, some use of
analytical skills, and some originality or insight.
COMMENT: True learning involves not only knowing principles or
concepts but also the ability to apply them to a real life situation. This will
be revealed in choosing what is relevant and making a logical argument
towards a recommendation appropriate to the client’s circumstances. The
level of research, the law considered and the argument
and recommendations should have a consistent thread.
P 50-64% Demonstrates the learning outcomes of the unit, such as knowledge of
fundamental concepts and performance of basic skills; demonstrates
sufficient quality of performance to be considered satisfactory or adequate
or competent or capable in relation to the learning outcomes of the unit.
COMMENT: Students who get a mark in this range usually demonstrate
some knowledge of principles and concepts, but do not apply them
consistently to the actual fact situation. Their answers often contain a lot of
regurgitation of law but very little application of it to the real life situation.
Recommendations are often generic (they could apply to any situation, not
specifically to the client’s situation) and are often just lifted from the
textbook or a generic website.
F 40-49% Fails to demonstrate the learning outcomes of the unit.
COMMENT: Students in this range usually make some effort to perform the
assignment task but fail to achieve what is prescribed for a P.
Low F 40% COMMENT: Students in this range usually fail to properly carry out the
instructions or perform the task specified in the assessment.