BLO2205 Corporate Law Assignment Sample
Here’s the best sample of BLO2205 Corporate Law Assignment, written by the expert.
Issue
The plaintiff Kem Weichoreak Kang-Kem claims that there exists a partnership with defendant Marilyn Jean Paine, with regard to running two restaurants. Each of the restaurants were setup as a partnership between the involved parties, and now plaintiff Kang-Kem wishes to end the partnership through court order.
The plaintiff also seeks to appoint the businesses to a single owner; whilst also settling monetary accounts. Hence, the issue dealt in this case are determination of a valid partnership and monetary/asset settlement.
Facts
The plaintiff claims that the partnership with Paine began in 1992 and continued to remain active thereafter. Restaurants ‘Milano Junction Café Restaurant’ and ‘Milano’s on the Lake’ are therefore held on lease and sublease; which are assets of the partnership.
Decision/Reason
The claims made by the plaintiff Kang-Kem were dismissed without any costs or possibility of cross-claims. Judge Barrett observed that no mutual interest that could signify a partnership between the parties existed; that is to say, that while both wished for each of the restaurants to prosper economically; the true interest of each individual party differed significantly.
Judge Barrett adjudicated that no mutual interest existed between the concerned parties that could qualify it as a proper or legal partnership. While, both contributed towards running the business, rights and obligations between the two differed as well.
The defendant Paine stated that her interests in the business was that to protect her economic situation in present and future, which differed from the plaintiffs. Moreover, the defendant held natural interest towards Kang-Kem with regard to seeing his achieve success and personal fulfilment, which arose from the fact that both of them were in a de facto relationship (Morse, 2010) .
Relevant Law
According to the Partnership Act Section 2, the judge found no evidence to suggest the existence of a partnership between the two parties:
- S(1) related to joint tenancy, joint property: The judge found no evidence to suggest that property was co-owed; rather, primary assets like ownership of lease were all solely held by the defendant.
- S(2) sharing gross returns: It was observed that even if the plaintiff shared gross returns, the property he received them from were owned by the defendant.
- S(3) sharing of profits: According to evidence from tax return fillings, the defendant had received the entire share of profits during the earlier days, with the exception in later stage when the claimant had received all the profit.
(NSW Government, 2018).
Hence, the principle of “carrying on a business in common” could not applied in the current case as seen in the case of The Duke Group Ltd v Pilmer [1999] 73 SASR 64, where it was pointed out that simply taking active part in a business does not qualify the individual as a business partner. Instead, such an action could result in the formation of agent-principal relationship; where the agents acts on behalf of the principal. Another business case quoted by Judge Barrett was that of Judge Griffith in Lang v James Morrison & Co Ltd [1911] 13 CLR 1, where Griffith implies that if the business is carried on, it must be done so on behalf of him or herself and not the business owner (Fletcher, 2000).
Observation/Significance for businesses
- All partnerships should be forged in contract outline responsibilities, duties and obligations of each of the partners involved.
- The Contract should have clear terms with regard to profit sharing and asset distribution during the termination of the partnership
- Investments made within a partnership should be represented within bonds
- Sharing of profits should be made according to each individual partner’s investment of time, obligation and resources towards the business
Conclusion
The partnership law protects those carrying a business in common, while also preventing unlawful claims with regard to join ownership. The essay points out that running a business without actually owning assets like property, is not sufficient to qualify as a valid partnership.
Reference List
Morse, G., 2010. Partnership law. Oxford University Press.
Fletcher, K.L., 2000. The Law of Partnership in Australia & New Zealand. LBC information services.
NSW Government. (2018). Partnership Act 1892 No 12. [online] Available at: https://www.legislation.nsw.gov.au/#/view/act/1892/12/historical2004-04-05/full [Accessed 19 Apr. 2018].
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