company and partnership law
harry sahi
COMPANIES & PARTNERSHIP LAW ASSIGNMENT 1, 2015
DUE: MONDAY 24 August 11.00 pm
Maximum 1,250 words
Value – 15% of overall assessment for the course
This assignment assesses the following course objectives:
CO1. Demonstrate a detailed knowledge of the law of Partnership, demonstrated through
the ability to identify and explain the key principles within the area.
CO3. Develop clarity of thought, critical analytical reasoning, and problem-solving and
communication skills in oral and written context.
Use the template provided on the website to analyse the following scenario and
submit it via Gradebook.
You can use Harvard or AGLC referencing. You can find a link for information on
both here www.unisa.edu.au/Referencing
Penalty for late submissions = 10% (-10 MARKS) PER EACH DAY LATE eg score
60% but 1 day late = final result of 50%.
Please note ‘traffic jams’ sometimes happen with Gradebook close to the closing
time and prevent submissions, making them late. You are advised to submit well
within time.
When you submit, Turnitin automatically generates a similarity report which is
used to report students to the Academic Integrity Officer. You are advised to take
note of any high percentages and to make sure you have not plagiarized by
referencing appropriately. About 30% of this report will be due to use of the
template which includes the cover sheet. If submitting early to check the report, you
can resubmit but be sure to use the same file name.
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QUESTION 1 (worth 40% of this assignment)
A group of friends and you have decided to incorporate a club you have been involved
with for the past 18 months under the Associations Incorporation Act 1985 (SA).
1) In your own words explain the advantage of such incorporation.
2) Using the relevant information from the Associations Incorporation Act 1985 (SA) and the associated regulations, prepare part of an application (as noted
below) to the Corporate Affairs Commission.
Within your application, name yourself as the public officer and you can assume
your association has a modest income of $30,000.
NOTE Parts which you do not need to prepare. For this exercise you do not
need to a) attach the club rules which would normally be required with the application. b) prepare any trust documents.
3) Briefly explain the accounting obligations of your incorporated association and state the fee which needs to accompany your application.
QUESTION 2 (worth 60% of this assignment)
Alan was the owner of a restaurant called Peking Duck. He had been fortunate enough to
buy the premises in which the restaurant was situated and to furnish it as he had wanted.
Due to a huge increase in recent competition in the surrounding area, Alan’s profits
declined and he struggled to meet costs. He approached his friend Bing for a loan of
$100,000 and they agreed to draw up a loan agreement which included the following:-
The lender will receive a share of the profits and losses to the extent of 40%.
The lender has the right to examine the business books at will.
The lender has a right to receive a quarterly business statement.
The lender has the right to be consulted and contribute to any major decisions
regarding the business.
With the injection of money into the business, Alan and Bing decided that the way to
improve trade was to refurnish the restaurant. Most of the money was spent on this and
the business improved and made a profit. Bing spent considerable time at the restaurant
and came to know many of the suppliers some of whom thought he was in a partnership
with Alan.
Three years later, Alan decided he wanted to retire and sell the business. He consulted
with Bing who told Alan he would be happy to buy out Alan’s share of the partnership.
Alan was surprised. He had never considered Bing to be a partner although Bing
obviously thought himself to be one. Bing argued that the $100,000 was the equivalent
to ¼ of the capital that Alan had contributed and that he was therefore entitled to ¼ of the
proceeds of the sale of the assets of the business. Alan argued that even if Bing was a
partner, the premises belonged to Alan alone and Bing had no right to the proceeds of the
sale of the premises. Other assets in the business included stock in trade, which included
$60,000 worth of wine, the furnishings now worth about $40,000 and an undetermined
amount for goodwill.
Using the Partnership Act 1891 (SA) and relevant cases discuss
1) whether Alan and Bing are in a business partnership and
2) IF we were to assume they are, how would the assets be divided?