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Question One: kate is the owner of a very successful business selling women's shoes. Kate's business is expanding rapidly and she wants to update her business structure from that of sole trader to a more appropriate structure. She seeks the advice of her accountant who tells her that she has a number of options, all of which have advantages and disadvantages. What would be your recommendation to Kate and why? What factors would influence your advice?
Questions two: Myra is the only shareholder and director of Kids Clothes Pty Ltd (Kids Clothes) which makes cheap children's clothing. The company has 10 employees. In the past Kids Clothes had operated profitably, however since 2011 it has been running at a loss. In July 2012 Myra paid herself a large bonus and then transferred all the remaining assets of Kids Clothes to a new company called Clothing for Kids Pty Ltd. The employees continue to be employed by Kids Clothes. Kids Clothes has no assets and owes each of its employees several thousand dollars in accumulated holiday, superannuation and long service leave entitlements.
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