Rachel and Stacey operate a busy café in Melbourne’s inner east.  They have been running the business together for 5 years and share profits equally.

As the years progress, Rachel and Stacey notice that they do not have enough working capital to keep the café running.  In addition, due to the slippery floors, there have been some customers that keep falling over and breaking their legs.

Rachel and Stacey are approached by Bruno who makes the best cakes in Melbourne.  Bruno wants to work with Rachel and Stacey in the café as the head pastry chef.

Rachel and Stacey believe that if Bruno worked at the café then his expertise in cake making will bring in more business for the café. Rachel and Stacey come to visit your office and ask your legal advice to:

1. What type of legal business structure is Rachel and Stacey currently operating? Provides reasons.                                                                       [5 Marks]

1. Whether their current business structure is the most suitable for the café or whether they should consider another form of business structure, and, if so, which one?

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