Bob Beech is a scallop fisherman and involved in commercial scallop fishing in t
ID: 412465 • Letter: B
Question
Bob Beech is a scallop fisherman and involved in commercial scallop fishing in the coastal water of Jervis Bay in New South Wales. The stock of scallops in this water is limited and subject to protective legislation to ensure regeneration. Hence, the Scallop Fishing and Marketing Act provides for a quota system. Under the quota system, a person must apply for a quota which will permit him or her to catch 50 tonnes of scallops in a calendar year. Further, the Scallop Marketing Authority will purchase any scallops up to the quota limit for each person. The Act also provides for a number of offences. It provides that it is an offence to sell scallops caught in New South Wales waters to any person other than the Scallop Marketing Authority and it further provides that it is an offence to catch more than the quota limit. Each offence carries a fine of up to $100,000. Bob has the physical capacity to catch more than 50 tonnes of scallops in a year and wishes to make more money from his business. His daughter Alice tells him that by incorporating a company he could double his catch. Is she correct?
Explanation / Answer
Yes, Alice is right in suggesting her father to incorporate a company. Bob Beech by incorporating a company can hire fishermen as his employees and can increase his company's capacity. A certain limit is set for the scallop fishers by the Fisheries Department. The same Scallop divers can be hired as employees in order to meet the capacity. This would increase the investment by certain amount. This would also increase the amount of scallops being caught by Bob Beech as the group entity have an access to catch more scallops rather than an individual. Bob would also be able to retain the cost at a cheaper rate as it would be less taxed and would surpass more barriers.