Unit 2 AOS 1 (Exam Only) Flashcards
what do businesses need to consider and comply with?
There are a number of laws and regulations businesses
need to consider and comply with
what happens if businesses do not consider all laws and regulations?
If they do not consider all of them, they risk losing
customers, ruin their reputation, can be fined, or lose
the right to continue trading
what are the legal requirements for establishing a business?
- registering the business name
- registering a website domain
- trade practices legislation
- business tax compliance
- work safe insurance
who do businesses register their name with?
Businesses register their name with ASIC (Australian Securities and Investments Commission)
what businesses do not need to register a name?
Businesses with the same name as the owner do NOT need to register their name but may choose to do so
what names must be registered with ASIC?
If personal name has ‘Pty Ltd’, ‘Motors’, ‘and Associates’ for instance, added to the name, then the name must be registered with ASIC
what is important to do before registering a name?
Before registering a name it is important to check whether or not the name is already taken by searching the ASIC website
what must a business have to register a name?
In order to register a business name, the owner must have an ABN (Australian Business Number)
what is becoming necessary for businesses to develop?
It is becoming a necessity for businesses to develop an online presence
what is a domain name?
the address of a website on the internet
what should domain names be?
Helps if the domain name is unique, easy to remember and spell so customers can find it
where can businesses see registered domain names?
Businesses can see whether a domain name has already been registered by checking the registry online: Australian Domain Administration
what does building and hosting a website cost compared to registering a domain name?
Building and hosting a website can cost thousands of dollars but registering a domain name costs between $10-$100 per year
what is taxation?
Taxation is the compulsory payment of a proportion of earnings to the government. Taxation is a means by which the government finances its expenditure by
collecting money from individuals and businesses.
who do the different taxes apply to and what are they?
Many different taxes apply to different types of businesses that business owners must be aware of e.g. income tax, capital gains tax, & tax on the provision of goods and services.
who is important for administering and collecting taxes for the federal government?
The Australian Tax Office (ATO) is the government body in charge of administering and collecting tax for the federal government
how is income tax calculated?
Is calculated differently for individuals and companies
what do individuals pay in income tax and what is it?
Individuals pay progressive tax which is when the rate of tax increases with the amount of money they earn
what do different businesses pay in income tax?
Companies pay a flat rate tax of 30% for larger businesses or 25% for businesses with a turnover less than $50 million
what are the major federal taxes that apply to businesses?
- pay as you go (PAYG) withholding
- goods and services tax (GST)
- fringe benefits tax (FBT)
what is Pay as you go (PAYG) withholding?
- Taken from an employee’s salary or wage directly
- Imposed on the employee
what is Goods and services tax (GST)?
- A broad-based tax of 10 per cent on the supply of most goods and services consumed in Australia
- Imposed on all consumers
- Businesses are only required to register for GST if they earn $75 000 or more in a financial year.
what is Fringe benefits tax (FBT)?
- Tax on the provision of a benefit to an employee — such as a car for private use, or a low-interest loan — in place of a wage or salary
- Imposed on the employer
what are the major state taxes that apply to business?
- stamp duty
- land tax
what is Stamp duty?
- Placed on documents that give evidence to transactions, such as the purchase of property
- Imposed on the individual or business
what is Land tax?
- Annually levied on the owner of the land
what businesses have to complete a BAS - BUSINESS ACTIVITY STATEMENT?
Any business registered for GST must complete a business activity statement
what is a BAS?
This is a form submitted to the ATO to report a business’s taxation obligations
when are BAS lodged and who with?
BAS is lodged periodically with the ATO
what do BAS allow businesses to do?
Businesses can remit tax due on income earned during the period as well as any GST and employee PAYG withholding obligations.
when and who is BAS lodged with?
BAS is lodged periodically with the ATO
examples of local government legal requirements?
- Land zoning
- Parking regulations
- Fire regulations
- Health regulations and food safety
- Signage regulations
- Applications for new developments
what is the Work Health and Safety Regulations?
The Work Health and Safety Act 2011 (Cwlth)
what does The Work Health and Safety Act 2011 (Cwlth) mean?
The Work Health and Safety Act 2011 (Cwlth) means businesses must work to ensure the health and safety of workers whilst at work.
what does The Work Health and Safety Act 2011 (Cwlth) aim to do?
- Secure the health, safety and welfare of employees and other persons at work
- Eliminates risk to health, safety or welfare of employees
- Ensure the health and safety of members of the public are not placed at risk by the conduct of undertakings by employers and self-employed persons
- Provides for the involvement of employees, employers etc. in the formulation and implementation of health, safety and welfare standards
what is Worksafe Victoria?
Worksafe Victoria is a government agency that aims to reduce workplace injuries and support injured workers
what does worksafe provide?
Worksafe provides WorkCover insurance which is a compulsory expense for Victorian employers
what does worksafe have the power to do?
It has the power to inspect work sites and prosecute employers for any breaches of health and safety requirements
what does WorkCover Insurance provide for employees?
It provides employers with insurance cover for the cost of benefits if their workers are injured or become ill as a result of their work
what can WorkCover Insurance cover?
- Replacement of lost income
- Medical and rehabilitation treatment costs
- Legal costs
- Lump sum compensation in the event of a serious injury
what does Australia have in regards to Trade Practices Legislation?
Australia has federal and state laws to ensure that businesses and consumers are protected from unfair trading practices
what do each major industry have in regards to Trade Practices Legislation?
Each major industry has its own code of practice which provides businesses with guidelines for dealing with customers
what happens if there is a failure to abide by Trade Practices Legislation?
A failure to abide by these guidelines can result in heavy fines for a business
what is the Trade Practices Legislation?
The Competition and Consumer Act 2010
what is the Competition and Consumer Act 2010?
a federal law that specifies what business behaviour is acceptable on issues such as product safety, pricing, and the way a business can compete in the marketplace
who is the Competition and Consumer Act 2010 administered by?
The Act is administered by the ACCC
(Australian Competition and Consumer Commission)
what is Consumer Affairs Victoria?
Consumer Affairs Victoria is Victoria’s government body established to regulate the marketplace, helping ensure fairness for businesses and consumers
what guaranteed rights does the Australian Consumer Law provide?
- Goods must be of acceptable quality (safe, durable, free from defects etc.)
- Products must be fit for a particular purpose
- Repairs and spare parts are reasonably available
- Services are carried out with reasonable care and skill
- Services are completed within a reasonable time
what happens if a good/service fails to meet a consumer guarantee?
If a good/service fails to meet a consumer guarantee they have the right to ask for a remedy through repair, replacement or refund.
what are legal requirements for establishing a business?
- registering the business name
- registering a website domain
- trade practices legislation
- business tax compliance
- work safe insurance
- work health and safety regulations
external professionals when establishing a business?
- freelancers
- bookkeepers
- recruiters
- sales professionals
- marketing consultants
- Information Technology Technicians (IT)
what are freelancers?
independent workers who charge businesses or individuals for work on a per job basis
what are the types of freelancers?
Many different types of freelancers
what does the term freelancers apply to?
The term doesn’t apply to the type of work, rather the employment relationship with the business they work for
what freelancer services do business often engage with?
Businesses often engage the services of freelancers who specialise in photography, design, copywriting and web design.
what are bookkeepers?
Assist a business in keeping and processing a business’s financial records
what do bookkeepers charge?
- Often charge an hourly rate for their services
- Rate varies depending on the skills of the bookkeeper and complexity of the task, at an average of $40 per hour.
what are recruiters?
- Recruiter professionals are often used by businesses to find the right staff
- Staffing is handled by a professional who understands what the business needs
what do recruiters charge?
Often charge a fee based on the salary of the person employed
what are sales professionals?
Sales professionals are trained and experienced in finding and persuading people to consume a product
why do businesses need sales professional?
Often businesses are good at producing valuable goods and services but find it difficult to find customers
what do sales professional charge?
External sales professionals will often charge a business a percentage or commission for every sale they bring the business
what are marketing consultants?
- Responsible for raising awareness of a business’s products and brand with their target markets
- They often run campaigns that involve advertising and other forms of communication with potential customers
what do successful campaigns increase?
Successful campaigns will increase brand awareness among consumers and result in increased sales
why do businesses need IT professionals?
Often, the IT needs of a business are beyond the capabilities of the business owner
how do IT services support the businesses?
Many IT service businesses exist to support the needs of other businesses,
with everything from the setup of servers and software to troubleshooting
problems that arise on a daily basis
is choosing appropriate suppliers important?
Choosing the right suppliers is an important part of developing a successful business
what is procurement?
The process of finding, acquiring and purchasing resources from suppliers
what will different businesses have in relation to suppliers?
Different businesses will have different supplier needs, yet they need to consider some crucial factors
what factors do businesses need to consider when choosing suppliers?
- price
- quality
- reliability
- proximity
- corporate social responsibility
why do businesses need to consider price when choosing suppliers?
businesses need to keep costs low to increase profit
why do businesses need to consider quality when choosing suppliers?
the quality of the materials/goods supplied can impact the quality of the final product
why do businesses need to consider reliability when choosing suppliers?
businesses need to rely on quick and timely delivery from suppliers
why do businesses need to consider proximity when choosing suppliers?
being in close proximity of the business can save time and money. Sourcing local supplies also is CSR and more environmentally friendly
why do businesses need to consider corporate social responsibility when choosing suppliers?
- A business that uses suppliers that are not CSR cannot be considered CSR themselves
- It’s the duty of the business to take care when selecting suppliers to ensure that its own business is not tainted by the poor practices of a supplier
what are the considerations when choosing socially responsible suppliers?
- Financial/economic impacts
- Social impacts
- Environmental impacts
what are the financial/economic impacts of suppliers?
- The costs involved in sourcing suppliers which meet the corporate social responsibility objectives of the business
- The costs involved in maintaining the procurement of socially responsible materials
- The savings gained from more efficient resource use
what are the social impacts of suppliers?
- The labour conditions involved in the manufacture, use and disposal of materials
- The labour conditions involved in the delivery of materials
what are the environmental impacts of suppliers?
- How resources such as energy and water are used in the manufacture, use and disposal of materials, as well as the delivery of materials
- Whether or not pollution and waste are produced from the manufacture, use and disposal of materials, as well as the delivery of materials
- How the removal or alteration of natural resources will affect flora and fauna
benefits of using suppliers which meet CSR objectives of the business?
- May reduce business costs - savings are achieved through
‘green’ initiatives such as reducing the use of energy. - Improves the reputation of the business - members of
the community, including consumers, are likely to perceive that the business is meeting wider community expectations. - Customers who are aware that the business is using socially responsible suppliers may be more likely to purchase from the business - this is likely to result in the business becoming more competitive and financially successful.
- Investors who are aware that a business is using socially responsible suppliers are more likely to invest in the business
limitations of using suppliers which meet CSR objectives of the business?
- Increased costs associated with sourcing socially responsible suppliers - socially responsible suppliers are likely to pass increased costs of production on to the business.
- Maintaining a supply chain that sources sustainable materials will be expensive and time-consuming - checking and maintaining checks on all suppliers claiming to be socially responsible is likely to take time, and result in financial costs.
- If changing to socially responsible suppliers, the business will need to work with suppliers to ensure that quality is on a par with competitors, if not superior
what are technological and global issues that may affect decision-making when establishing a business?
generating customer databases and contacts with overseas suppliers and retailers
what do business need to plan for with technological and global issues?
Businesses need to plan for and respond quickly to technological advances and global issues that may affect the way they operate
is technology stagnant?
Technology is continuously advancing
does technology need changes?
Some new technologies can become redundant or outdated not long after implementing due to new advances in technology occuring
what does technology affect?
Technology affects how businesses create their goods and services but also plays a role in the administration and marketing of a business
what is technology in manufacturing?
- Many businesses use robotics or 3D printing
- 3D printers can create whole buildings, prosthetic limbs etc
what can robotics perform?
Robotics can perform a wide range of tasks to a greater degree of precision
what can robotics help do, benefits and limitations?
Robotics can help produce more in a short period of time, higher quality products are produced and less labour is needed but has its downfalls - loss of jobs, costly to implement, needs a lot of space, needs maintenance etc
what is technology in administration?
Smartphones and web-based software has progressed heaps over the years
why can technology in administration help the owner?
The owner of a business can do most things using their phone eg viewing live security footage, emails, web-based conferencing, online banking
what is technology in marketing?
Lots of marketing is now done through social media
Advantages of social media marketing are?
- Inexpensive
- Easy to use and monitor
- Effective method of gaining exposure
Disadvantages of social media marketing are?
- A marketer doesn’t have control over what online consumers write about the product
- Difficult to measure the number of people exposed to it and the frequency of how many times they’ve been exposed to it
what has technology paved the way for?
Technology has paved the way for flexible work options
what does remote work reduce?
This reduces overhead expenses associated with providing additional office space
what does remote work allow for?
Allows for overseas workers to be available for roles
what platforms are used for remote work?
Zoom, G Suite and Slack are used for video conferencing
what is a customer database?
is a bank of information on existing and potential customers, including their contact information, personal details, previous interactions, buying habits and preferences
how much data can customer database collect?
Technology has the potential to collect A LOT of data
what may business owners choose with customer databases?
A business owner may choose to build their own customer database using a spreadsheet or to purchase access to a database
how can customer databases be collected?
Data can be collected from existing customers or retrieved from market research companies who sell the information to businesses for a fee
what must businesses do with customer databases?
Business MUST protect private customer details from hackers
what are the positives of establishing a customer database?
- Easily communicate with customers which results in improved customer relationships and helps the business to provide better customer service
- Helps build customer loyalty through frequent contact
what are the negatives of establishing a customer database?
- Customer databases can be time consuming to develop
- Costly to purchase from a third party
what are global issues?
- Overseas suppliers
- Overseas customers and retailers
what suppliers do Australian businesses have access to?
Australian businesses have access to suppliers all around the world
how has technology allowed for communication with suppliers?
Technology has allowed businesses to make contact with overseas suppliers through the internet, skype etc.
advantages of overseas suppliers?
Having world wide suppliers provides a wider range of affordable and potentially better quality inputs or access to inputs unavailable in Australia
what is essential when business use overseas suppliers?
It is essential the owner chooses CSR suppliers
disadvantages of overseas suppliers?
hidden costs associated with different cultures and time zones, long lead times, takes time to find a suitable supplier etc
how have other countries/overseas customers affected the economy?
The economic growth of other countries such as China has resulted in a greater demand for Australian commodities eg mining resources and agricultural products
what happens is businesses make contacts overseas?
The business owner may decide to develop contacts with overseas retailers, making them an exporter
benefits of exporting?
- Exporting can allow access to more customers and larger markets
- Exporting can increase profits, spread the business’s risk and reduce dependence on the local market
limitations of exporting?
Exporting does have hidden costs, can be costly to develop export markets due to the time taken to find support and customers willing to purchase the business’s products
When developing contacts with overseas retailers, the business owner will need to?
- Meet with the prospective customers
- See the overseas market first hand
- Investigate local pricing
- Experience how business is conducted in the new environment
