Analysis and evaluation of two particular forms of ownership structure

You are to analyse and evaluate two particular forms of ownership structure that Mr and Mrs Dundee could consider and make recommendations based on your findings.

Executive summary

The aim of the paper is to formulate the best business structure for Mr. and Mrs. Dundee as they are planning to set up a new crocodile tour business. The couple wants to enter the crocodile tour business in Darwin as they have been working in the Darwin region for three years. From among the two most common business structure such as Private company and Partnership, it is suggested that the couple follow the partnership firm structure. This is because it is an ideal structure for part time business and also helps in reducing the burden of business such as tax regulation, laws and others. Moreover, it also help the company to understand the external environment of the business with the knowledge of the partner. Thus, it is concluded that a partnership firm is ideal for crocodile tour business.  


Tour industry is growing at a fast rate over the years with tour operators coming up with new ideas to invest in this competitive industry and gain a lot from the market. Similar initiative is being made by Mr. and Mrs. Dundee as they want to start a small boat tour for the tourist visiting Darwin and Outer Darwin Regions. The boat tour will take place in the crocodile prone region where they have been employed in the crocodile industry for three years (nationalgeographic 2018). The initiative is made to improve the tourists’ experience and also offer jobs to local people with its expansion. The report analyzes the best business structure between private company and partnership firm that will be suitable for the Dundee family. It further analyzes the competitors and external environment that will impact the business.

Two types of Business Ownership

In order to start a business it is necessary to analyze the type of business structure to be followed so that the further plans for the business are based on the structure. The two most common type of business structure that is followed by most of the business is private owned company or partnership firm. Both the type of business structure has its own advantages and disadvantages. 
Private Company:
The company is held by relatively small number of shareholders that own the share of the company. This type of business structure has its own advantages and disadvantages which one should know in order to choose an appropriate business structure for itself (Caselli and Negri 2018). 
Advantages: the shareholders and board members will have limited access to the share of the company, help to raise capital easily for the business, the company operates even if any of the member of the company leaves in between, has its own legal existence and holds a better business status. 
Disadvantages: the audited annual returns and other account documents needs to be inspected by the public inspection, the private company id is expensive and takes time to get issued, separate cost to be incurred in taking professional help, limited economies of scale opportunities for the private company (Carney et al. 2015). 
Partnership firm:
It is setting up a business entity by two or more partners that take up the ownership of the firm. Partners of the firm divides the profit from the business according to the percentage of share they are holding in the business (Warner and Sullivan 2017). The profits and losses gets passed to the owners of the business like in the sole proprietorship business. 
Advantages: easy to share responsibilities, start-up costs goes down and is less compared to the private firms, large capitals can be acquired by the firm, the borrowing capacity in partnership firm is more, easy to save tax, easily alter external structure with less cost and less number of external regulation (Warner and Sullivan 2017).
Disadvantages: greater liability of the firm, the burden of the liability falls on each partner separately, more chances of disagreements and arguments and it is very costly to value the asset of the partner if they decide to leave the firm.
From the above analysis it is clear that each type of business structure has its own advantage and disadvantages and to decide on the type of business structure that is suitable for Dundee family it is important to take into consideration other factors that might affect the business. Other factors such as tax implication, government laws of Australia and registration. Thus to start a business the owners first need to find the laws and registration that applies to their business. The crocodile tour business first needs to be registered before starting their business activities (Business 2017). While registering the business becomes liable to various taxes such as goods and service tax, tax file number and others. Various legislation that tour business needs to know are State Tourism legislation, State Restricted Trading Days, National Marine Safety laws (Business 2017). License that needs to be generated before starting the crocodile tour business are boating licensing, permission for use of marine parks, permission to carry out crocodile watching tours, permission for taking photographs, license to carrying foods and drinks in the marine eco system during the tour and others.

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Further Analysis of Business Structure

To know the best business structure that the Dundee family can choose for their new crocodile tour business a primary research was conducted in which the people belonging to similar tour industry were asked to choose from the two business structure option. The primary research took place by means of emails to the nearest tour operators so that they can share their views through emails itself.

  Private Company Partnership
Result 45% 55%

Table 1: Result of Primary Research
Source: Author’s creation 

From the primary research result that was received through the mail it was seen that partnership is much better than the private limited because it is widely used form of business for part time entities and reduce the burden of liability on the owners. 
Secondary research has been conducted from various newspapers, magazines and internet. It has been found that the most commonly used business entity in eth tourism industry is private limited company compared to partnership firm. This is because the tour owners wants to make their own identity and status in the market. However, there are business owners that also carry out limited liability partnership as their business structure. It is an ideal form for business that wants to carry out a tour business on a part time basis. It has the advantage of not auditing the business financial status if it is less than $64,000. 
Thus it is seen that as Dundee family wants to operate the business on a part time basis it is suggested that they take up partner business structure for the crocodile tour business.


The crocodile tour industry face a lot of competitors in the Darwin regions as there are already many tour operators already operating in Darwin with similar services such as Travel Freedom Kakadu, Real Aussiea Adventures, Wildlands and others ( 2018). They all operate in Darwin and offer crocodile tour to the tourists (realaussieadventures 2018). 
External Business Environmental Impact
Social: the social environment such as the local and indigenous people may put an effect on the business. They can take part in the jobs offered by the business while taking tourists on these spots (Grant 2016). The acceptance of the business by the local people will help in generating jobs and more profit for the company. 
Economic: the standard of living of the people, the tax structure of the country will have a direct impact on the crocodile tour business as it helps in defining its revenue and cost. A low standard of living of the Darwin people will make it easy for the business to attract local people for jobs in the business. On the other hand a high standard of living of Australians will help them get sufficient customers for the business. 
Environmental: safety issues of the region, ethical practices and others has a direct impact on the business as they have to design their business activities according to these environmental situations. For example for taking tourists in a crocodile tour, there can be environmental emergencies, pollution consideration and others (wildlands 2018). According to these the business needs to design their safety gears and boat engines.


Thus from eth above analysis it can be recommended to Mr. and Mrs. Dundee that in order to start a crocodile tour business they should follow a partnership business structure as they want to pursue it on a part time basis along with their work. It will be useful as they will have a partner to look after their business when they are busy with their jobs. Moreover it is recommended that they should carry out a proper external environment and competitor’s analysis before moving forward with the idea as these factors have a huge impact on their business. There are various competitors in eth region of Darwin that carries out similar tour business. Thus, in order to be successful among them and attract sufficient customers it is necessary that they formulate a unique business strategies and entertainment plans for the tourists. Moreover, a partnership form of structure will also help them to get ideas about such external factors from the ideas that the other owner holds about this industry.


From the above analysis it can be concluded that a partnership business structure is ideal for the Dundee family. This is because it has a lot of advantages as they want to open a business on a part time basis. Opening a crocodile business is also very competitive as it involves a lot of competitors in the same region. Thus, to be successful in this industry it is necessary for them to do a proper market analysis and abide by the environmental needs, tax laws, regulation of the country. Moreover, a well-planned analysis of the competitors will add to the benefit of the business. 


Business 2017. Tourism industry fact sheet. [online] Available at: [Accessed 21 Feb. 2018].
Carney, M., Van Essen, M., Gedajlovic, E.R. and Heugens, P.P., 2015. What do we know about private family firms? A meta?analytical review. Entrepreneurship Theory and Practice, 39(3), pp.513-544.
Caselli, S. and Negri, G., 2018. Private equity and venture capital in Europe: markets, techniques, and deals. Academic Press.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons. 2018. Crocodile Park Darwin | Jumping Crocodile Cruise » Travel Freedom Kakadu. [online] Available at: [Accessed 21 Feb. 2018].
nationalgeographic 2018. The Croc Catchers NT. [online] Available at: [Accessed 21 Feb. 2018].
realaussieadventures 2018. Darwin Tours | Real Aussie Adventures. [online] Book Small Group Australian Adventure Tours Here | Real Aussie Adventures - The original Australian adventure travel specialists. Available at: [Accessed 21 Feb. 2018].
Warner, M. and Sullivan, R. eds., 2017. Putting partnerships to work: Strategic alliances for development between government, the private sector and civil society. Routledge.
wildlands 2018. Wildlands Corroboree Billabong Wetland Cruises. [online] Wildlands. Available at: [Accessed 21 Feb. 2018].

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