Unit 2 AOS 1 - new Flashcards
Key Legal and Government regulations:
Explain key legal and government regulations
There are many licences, permits, approvals and authorities which must be taken into account by business owners. All business owners have a legal obligation to observe the statutory regulations when commencing and operating a business. Fulfilling all legal obligations can be frustrating and costly. However, a business that does not obey the law can risk losing customers and their reputation.
Key Legal and Government regulations:
Explain when and why a business must register a name
Businesses need to register their name, except when it is that of the owner, then it is optional. If a business has the phrases such as ‘PTY LTD’, ‘Motors’, ‘and associates’ or ‘and co’, then the business name must be registered. This is to prohibit anyone else from trading under a similar name, and to protect consumers by allowing them to identify the owner of a business name.
Key Legal and Government regulations:
Explain what must be taken into consideration when registering a domain name
A key element of a business’s online
presence will be the domain name, which is the address of its website on the internet. It is important that the business chooses a unique domain name that represents its activities. It also helps if the domain name is easy to remember and spell, so customers can find the website without difficulty.
Explain income tax - taxation compliance
Income tax:
levied on the taxable income of an individual or a business. Companies who have a annual turnover of less than $50 million pay a flat tax rate of 25%, companies earning higher than that figure pay a flat tax rate of 30%.
Individuals pay a progressive tax rate.
0 to $18 200 Nil
$18 201 to $37 000 - 19c for each $1 over $18 200
$37 001 to $90 000 - $3572 plus 32.5c for each $1 over $37 000
$90 001 to $180 000 - $20 797 plus 37c for each $1 over $90 000
$180 001 and over - $54 097 plus 45c for each $1 over $180 000
Explain other federal and state taxes and outline GST and land tax - taxation compliance
There are many other federal taxes that apply to businesses, depending on their activities.
GST:
Goods and services tax is a broad-based tax rate of 10 percent on the supply of most goods and services consumed in Australia and is imposed on all consumers. Businesses only need to register for GST if they earn $75,000 or more in a finical year.
Land tax:
Land tax is annually levied on the owner of the land.
Outline what a business activity statement is - taxation compliance
Any business registered for GST must complete a business activity statement (BAS). This is a form submitted to the ATO to report a business’s taxation obligations. Businesses can remit tax due on income earned during the period as well as any GST and employee PAYG withholding obligations.
Explain zoning - Local government legal requirements
Local government ensures that business activities do not infringe on residential areas. Each council has a local planning scheme that describes the types of activities or developments that may occur in different areas of a suburb or district. Land is zoned for particular uses, such as residential, industrial, business or other. Business must consult with local council before commencing.
Explain health services - Local government legal requirements
Local government also ensures compliance with health regulations under the Food Act 1984 (Vic). Each local council supplies businesses with the regulations and standards they must meet in order to obtain a licence to operate. A health officer will inspect premises regularly, often without warning, to ensure the business owner maintains standards. If problems occur, then the business is given a period of time to rectify the situation or it will be closed down.
Explain what WorkSafe Victoria does
WorkSafe Victoria a government
agency that aims to reduce
workplace injuries and support
injured workers. WorkSafe provides WorkCover insurance, which is a compulsory expense for Victorian
employers. It provides employers with insurance cover if workers are injured or become ill as a result of their work.
Outline the tasks of bookkeepers - professionals
Bookkeepers assist a business in keeping and processing a business’s financial records. This helps a business to meet all its taxation and legal obligations. Bookkeepers often charge a hourly rate, varying depending on the skills of the bookkeeper and complexity of the task, at an average of $40 per hour.
Outline the role of freelancers - professionals
Freelancers can be any type of independent worker who charges
businesses or individuals for work on a per-job basis. Businesses often engage the services of freelancers that specialise in photography, design, copywriting and web design.
Outline the role of sales professionals - professionals
Sales professionals are trained and experienced in finding and persuading people to consume a product. External sales professionals will often charge a business a percentage or commission for every sale they bring the business.
Identify factors to consider when choosing a bank account
Bank fees, Interest rates, Overdraft facility, credit cards, convince and support
What is ‘seperate entity’ and why is it useful
Seperate entity - accounting
principle recognising that the
owner’s finances are separate
to those of the business and
therefore business transactions
should be recorded separately
Advantages:
- Easier to monitor financial performance and position of business
- easier to calculate expenses
Explain why financial control systems are useful for a business?
The importance of financial control systems is it can help to prevent problems and losses such as lack of cash flow, damage to assets or fraud. If these problems persist the business’s financial performance may be hampered or the business may be forced to shut down.