Business Law and Limited Liability Company

This assignment provides an in-depth analysis of business law, focusing on limited liability companies (LLCs) and tort laws. It covers the advantages and disadvantages of LLCs, including their benefits for small businesses and entrepreneurs. Additionally, it delves into the concept of tort laws, explaining the elements of negligence and remedies available under these laws. The assignment also touches upon corporate law in Australia, discussing the Corporations Act 2001 and its implications for business operations.

Business and Company Law

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
QUESTION 1..................................................................................................................................1
Advising John and Marley are entitled to pay compensation to the club members....................1
QUESTION 2..................................................................................................................................5
Advising John whether structure of partnership is suitable or not..............................................5
QUESTION THREE.......................................................................................................................7
Partner who is liable for lease obligations, fees of the architects and Glenda's injuries.............7
QUESTION FOUR..........................................................................................................................9
Describing a case which considered or deemed as a partnership business along with
justifications.................................................................................................................................9
QUESTION 5................................................................................................................................12
Concept of limited liability........................................................................................................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business or commercial law is recognized as body of legislative framework that governs
activities as well as functions of firms. Such law is considered as civil’s legislation branch which
in turn deal with all kind of issues that are related to private and public law. Hence, commercial
or business law is highly significant that regulates corporate contract, hiring as well as
manufacturing and selling practices. Besides this, Companies Act contains rules pertaining to
formation, regulation, monitoring and controlling firms. With the motive to offer high level of
protection to companies as well as other stakeholders Companies and Commercial laws were
introduced by Australian authorities. On the basis of requirements, concerned authorities amend
rules and thereby offer convenience to relative parties.
The present report is based on different case situations which will provide deeper insight
about the breach of duty of interest, conflict of interest etc. Further, it will also shed light on the
extent to which partnership agreement or structure suits to John case. Besides this, report also
highlights cases and laws in relation to negligence and limited liability. It also depicts legislation
pertaining to the liability of lease and injuries.
QUESTION 1
Advising John and Marley are entitled to pay compensation to the club members
Overview: Given case presents that Jacob and Marley, tennis players, formed club named
as ‘Bond University Tennis Club’. In this, Jacob acts as president and Marley becomes secretary.
Such club was joined by Malcolm, Jason, Alex and 10 other people, who have interest in tennis,
with the membership fees of $100. With the motive to encourage member’s tournament was
organized by the club.
Issues: Case situation entails that, in tournament, sports drinks were supplied to the
players with an objective to raise their energy and efficiency level. In this, due to the inclusion of
contaminate many players of the club fall ill. From assessment, it has found that, in reality, with

the purpose of saving money sports drinks were purchased by the club entities at discounted
rates. Along with this, it also assessed that both the entities had already been recalled that
bacteria found in some bottles. Hence, irrespective of knowing such aspect, sports drinks were
supplied by the entities to the members due to which they became ill. Thus, in this, issue is that
ill players can take action in against to the club considering the negligence as base.
Laws: By taking into account the current case situation, it can be presented Tort Law
(Australia) is highly relevant. Tort Law of Australia presents tort as a civil wrong or negligence,
other than breach of contract. Hence, tort is considered as legal wrong and in this, innocent party
has right to sue on defendant for compensation. Law of negligence presents that, negligence is
when concerned authorities failed to undertake or exercise reasonable care. Main elements of
Negligence Act (Australia) need to be considered while evaluating the activities that whether
they fall into the category of negligence or not are as follows:
 Duty of care: In this, there is a need to assess whether defendant party owed a legal duty
of care in relation to plaintiff. In accordance with such aspect,
 Breach: Defendant party’s act is considered as wrong where breach of duty is found
intentionally (Elements of Negligence, 2017). Along with this, when defendant party fails
to perform act in a certain way then it is also considered as negligence.
 Causation and Foreseeable: Defendant party is found to be liable when he already
knows that actions may cause injury to others. In other words, it can be presented that
when concerned authority has idea about the aspect that activities will negatively affect
others.
 Damages: For getting compensation, plaintiff party is required to prove harm and injury
occurred due to the defendant’s action as well as damages must be recoverable in
monetary form (Elements Of Tort Of Negligence, 2017).
Case laws:
Swan v Monash Law Book Co-operative (2013): In the concerned case,
psychiatric injury was suffered by plaintiff party due to her work for defendant. Hence, from
evaluation, it has assessed that allegation was made by plaintiff party in against to the defendant

party. Thus, due to the failure of defendant in relation to performing duty of care court gave
judgment in the favor of plaintiff.
Donoghue v Stevenson 1932 AC 562: In such case, Donoghue found snail in the bottle of
ginger beer. Due o this, Mrs Donoghue fell ill and sued the ginger beer manufacturer. Thus, in
this, House of Lord presented that manufacturer of ginger beer needs to take reasonable duty of
care for avoiding such omission or acts (Tort laws, 2017). On the basis of Negligence Act,
manufacture has duty to perform activities in a responsible way which in turn avoids injury to
others. Thus, by considering all such aspects, HOL held Stevenson accountable in relation to
giving compensation for the loss or injury suffered by Donoghue.
Bolton v Stone [1951] AC 850: Through assessment, it has identified that in the
concerned case plaintiff or innocent party was injured by a cricket ball while standing on street.
In this, HOL gave judgment that defendant party was not liable because rarely ball was hit out of
the ground. Along with this, it is already predicted or expected that if ball hit outside the ground
then it may injure some person. In this, HOL said that defendant party is not accountable for
giving compensation to Plaintiff. Moreover, in this, all the allegations were clearly justified by
the defendant party.
Paris v Stepney Borough Council [1951] AC 367: In such case, plaintiff party worked
for defendant Council in Garage. Case situation of Paris v Stepney Borough Council clearly
presents that piece of metal flew off and entered in the good eye of innocent party which in turn
resulted into blindness. In this, court gave judgment that due to the negligence of employer, in
relation to not providing him with goggles injury was occurred (Tort laws, 2017). Thus, court
entailed in judgment that Council failed to perform duty of care which he owed in relation to
employer. Hence, as per all such aspects it was depicted by judge that Council legally liable for
paying compensation to plaintiff.
Along with this, there are some more cases that are highly related with the situation of
Jacob and Marley such as:
 Mathews v Winslow Constructors (Vic) Pty Ltd [2015]: ationwide News Pty Ltd v Naidu & Anor; (2007):
 ISS Security Pty Ltd v Naidu & Anor (2007):

Applications: All the above depicted case laws are highly applicable on the situations on
Jacob and Marley. Moreover, as per the given scenario due to the negligence of both
manufacture and John member of tennis club fell ill. Caser of Donoghue v Stevenson clearly
states that it is the liability of manufacturer or other units to offer fresh and suitable products or
services to the customers. In such case, court provided Donoghue with relief in the form of
compensation. Besides this, Paris v Stepney Borough Council is highly associated with the
analyzed situation. Moreover, in this, due to negligence of employer, injury was suffered by
employee. In the context of Jacob’s and Marley case, both the elements such as breach of duty
and damages of negligence are present. Thus, considering all such aspects, it can be presented
that, in Jacob’s and Marley’s case for saving money bacteria filled sports drinks were provided
by both the entities to members. Being an organizer of tournament, it is the accountability of club
entities to provide members with fresh sport drinks. Thus, considering all such aspects it can be
presented that Jacob and Marley owes duty of care towards the members.
Conclusion: Referring all such aspects, it can be concluded that ill players can take legal
action in against to the club entities such as Jacob and Marley. Thus, plaintiffs or innocent parties
can sue on RF Club owners for getting compensation. The rationale behind this, knowingly
wrongful act was performed by Jacob and Marley for attaining monetary benefits. Hence, by
taking into account Negligence or Tort law of Australia it can be depicted that members of club
have right to demand for compensation in against to illness suffered by them.
Jacob and Marley advised to including exclusion clause while forming the club and
providing people with membership. On the basis of such aspect, by mentioning exclusion clause
in the agreement both the entities can limit their liability towards members. In addition to this,
volenti non fit injuria also helps defendant party in against to plaintiff (Remedies in Tort Law,
2017). Thus, for getting benefits from the same club entities need to do an agreement with
members that they are free with the duty of care. Thus, by making focus on all such aspects both
Jacob & Marley can limit their liabilities and thereby gets benefits or relief.

QUESTION 2
Advising John whether structure of partnership is suitable or not
On the basis of cited case situation, John is working as a foreign trader in large bank, but
now along with the 25 of his workmates decision has taken by him in relation to leaving such
firm. All of them decide to or planning in relation to operating as a partnership firm. Considering
all such aspects, it can be stated that, as per Partnership Act, 1963, it implies for the business
structure that includes number of people who perform activities and carry out work together.
There are mainly two types of partnership that can be undertaken by business entity such as
general and limited. Limited partnership implies for the one where liabilities of other associates
pertaining to debt and obligation is not high. In this, some partners are assigned with unlimited
liability, whereas others handling limited obligations. Nevertheless, in such kind of there is no
limited number of partners (Partnership Act 1963, 2017). On the contrary to it, general
partnership refers to an arrangement, in which partners who jointly conducted business share
unlimited liabilities. In accordance with such aspect, under general partnership arrangement,
personal assets of partners are considered or used to meet obligations. However, as per
Partnership Act, number of people who can carry out work together accounts for up to 20.
Considering Partnership Act (1963), it can be said that firm which involves two or more
people is recognized as partnership firm. In addition to this, Companies Act of Australia clearly
presents that an association or partnership firm involves more than 20 persons. As per cited case
situation presents that John and his 25 workmates are planning to establish a joint firm as
partnership (Partnership Act 1963, 2017). Thus, considering sub section (4) of Companies Act, it
can be presented that partnership is a good structure for John and his workmates. Moreover,
Partnership firm provides partners with several rights and responsibilities which in turn ensures
smooth functioning of business operations as well as functions.
In accordance with section 6 (1), partners share joint ownership and take decision with
mutual understanding. Along with this, section 6 (2) & (3) of such act entails that partners are
entitled to share gross return, profit as well as loss in accordance with the predetermined
agreement. Further, section 28 (9), of Partnership Act (1963), clearly exhibits the right of
partners in relation to accessing firm’s book and confidential financial reports. In addition to this,
Partnership Act also contains rules and regulations pertaining to partner’s liability etc.

Section 9 of Partnership Act (1963), provides partners with some powers which in turn
helps in binding firm such as:
 In the partnership firm, other than limited firms, partners are considered as an agent. In
addition to this, act done by the partner must be in favor of firm and other individuals.
 Along with this, other partners have power in relation taking action in against to the
entity of business who takes and implement decision without doing any consolation with
others (Partnership Act 1963, 2017).
Case laws in relation to the power of partners:
 BARNARD vs. PLANK ROAD CO.
 BANNER TOBACCO CO. vs. JENISON.
Hence, along with the powers, partners have also some liabilities with which they need to
comply such as:
 On the basis of Partnership Act (1931), each partner of the firm is jointly liable for debt
and obligations which are associated with the business unit.
 In addition to this, as per section 12, if partner is recognized as an individual then after
the death of partner the dead partner’s estate is liable, in the due course of administration
for the debt and obligations.
Thus, by taking into account all such aspects, it can be stated that partnership is a good
structure for the business. As it offers opportunities to John and his other workmates in relation
to sharing profit or loss and thereby reduces the risk level. Besides this, several power and rights
are offered by Australian authorities to the partners. Along with this, such Act also contains
information about the duties and liabilities of partners and facilitates smooth functioning of
operations. Considering all such aspects, it can be presented that partnership structure will be
suitable for John. In addition to this, John and his workmates need to comply with section 53 of
partnership Act at the time of partnership firm formation.

QUESTION THREE
Partner who is liable for lease obligations, fees of the architects and Glenda's injuries
In the market there are wide range of businesses and companies operate which posse
various structures. It is not necessary that all the firms follow one particular structure in order to
establish business in the industry. Some basic business structures which are generally followed
by the entrepreneurs are like limited liability, sole trader, proprietorship, partnership etc
(Campbell and Boothby, 2016). In the current case, there are two girls who want to start new
business with each another. On the basis of this particular condition it can be clearly seen that,
they want to establish a partnership firm which is chess store. Herein, Darryl and Julia these both
are highly effective as well as passionate players of the game i.e. chess. These both the people
love this specific game and due to which they think that they should open a store of chess game.
Due to unavailability of they unable to open a chess store. Further, friend of Julia who is Otis and
says that he has some fund and wants to make investment in particular business. It is one kind of
solution for Julia and Darryl where Otis invest amount worth of $100,000. Behind investing this
amount, Otis made condition that he will not take any kind of interest but partners have to share
50% of net income earned by them.
Issues
In order to establish the proposed store, responsibility in order to find appropriate
location for business is given to Drryl by Julia. In absence of Julia, Drryl signs a property in his
name in terms of lease rather than rent of any other forms. Further, the store was founded in
Burleigh Heads which is not suitable and effectual location to open a chess store. When Julia
returns then saw that Drryl signs a property in lease which is not proper. Further, it is not located
in proper place which is very negative condition for them. When Julia and her friend Glenda
enters in the leased property then her Glenda left lying on the floor. Due to laid down on the
floor, she suffered from leg injury which become huge issue. Apart from this, another issue come
into consideration is related to fees of architects (Dimatteo, 2016). As per this, Drryl not asks to
owner of the leased property to repair the floor. Further, any kind of such conditions are not
mentioned or signed among both the parties which are like Drryl and owner of the property. For
repairing the floor and make it proper so that, any customer not laid down partners have to hire
architects.

Therefore, Drryl not asks at least once to Julia about the location and property before
signing on his name. In addition to this, issue of fees as well as expenses of the architect arisen
that who will be liable to pay such amount. When Glenda enters in the store which is signed by
Drryl for opening a chess store then laid down by which suffered from her leg's injury. Further,
issue of the case is that who will be liable or obliged to fulfil such all the issues faced by one
partner from another partner (So, 2016). For making solution of this particular case and problems
some laws and acts will be applied which are stated in below section.
Rules
In order to make proper and better solution of particular case, some legal laws and rules
applied on the scenario. Due to lack of proper implementation of the laws and legislations it is
not possible to make effective solution as well as conclusion. When looking at the current case
then it can be seen that, it falls under partnership act where some specific rules are mandatory to
follow by the partners. As per the current scenario, Drryl makes decision about location of the
store without consulting another partner who is Julia.
As per the Partnership Act 1963, section 23, all the partners of a partnership firm must
have mutual rights and proper understanding. Basic reason behind this is that, it helps to make all
the things and concise so that, any kind of dispute not takes place at there. Further, when any
type of specific decision related to business required to made then also all the partners must
agree. Herein, if one partner agrees on particular concept or judgement but another not then the
decision cannot be applied. Apart from this, each and every partner of the company is entitled in
order to take participation at the workplace while making any kind of modifications or changes
(Partnership Act 1963, 2015). In this, if one partner is out of town and unable to discuss about
the situation then another person is not liable to complete that work alone. Moreover, when any
kind of losses suffered by any of the person who enter and come in business then responsible
partner is liable to accomplish suffers of him or her as per the legal laws and acts.
Apart from this, according to Partnership Act 1932, partners of the firms are bond to
operate and carry a business to meet objectives and goals framed. Herein, any kind of personal
decisions and objectives cannot involve at any cost. Further, all the partners must be faithful to
each other where anything related to business should be disclosed among all the partners. If any
one partner breaks faith of others them he or she only is liable to fulfil all the losses suffered by

them. Along with this, any one partner not possesses authority to make business decisions
without asking to partner. If this rule is broken by one partner then only that person is liable for
fulfilling another owner of the company (Partnership, 2017). Moreover, if any additional fees
has to pay from the business due to problems generated by one partner in the business then also
he is liable as per the partnership act 1932.
Conclusion
Considering to the above stated rules and acts of partnership it can be concluded that,
behind signing a property on lease by Drryl without asking Julia at least one time liable person is
Drryl only. The reason is that, as per the Partnership Act 1963 any kind of business decisions
must be made when both or all the partners of firm agree. Further, not mentioning requirement of
repairing the floor company has to pay fees and amount to architects In this case, Drryl is
responsible for paying sum of money to architect for consulting with him and making changes in
floor. Moreover, it is mandatory to make modifications in existing floor because any person can
laid down upon it. According to third situation, Glenda suffers from injury of leg due to lying on
floor of that store which is taken as a lease by Drryl without consulting with Julia. In this
condition also the first partner i.e. Drryl is liable for fulfilling losses and injury suffered by
Glenda. Hence, it can be said that Drryl is liable or responsible for the lease obligations, fees of
the architect and injury suffered by Glenda.
QUESTION FOUR
Describing a case which considered or deemed as a partnership business along with justifications
A business which is established by two or more owners using capital of all the persons is
known as partnership business structure. Another than this, there are wide range of structures
available in the market which followed by several entrepreneurs for existing in the market. In the
current section or question, some cases are given. Under all the scenarios, it is required to
identify that which in which one case proper and legally partnership will be considered. For
considering and analysing it is necessary to consider some legal rules and regulations. Basic rule
is that, all the partners must be agreed to start the firm and all have clear understanding about the
objectives and goals made behind establishing the company (Goldman, 2013). Apart from this,
firm must be existed in the market and agreement signed between partners. There are some rules
and legal laws available which helps to determine that particular business is whether possesses

position of partnership or not legally in the market. Further, such rules are mentioned and
explained below:
 In order to establish business in the market, capital should be brought by all the partners
whether in form of cash or any other. Along with this, it is not mandatory that capital
must be invested in equal proportion because it depends on capability of partners.
 At the end of an accounting period, whatever income generated by company that should
be divided among all the partners on the proportion at which capital invested. On the
another side, if the firm suffers from any kind of losses then also bared by all the partners
involved in the partnership business (Partnership Act, 2010).
 A legal document must be made and that agreement should be signed by all the partners
considering legal laws and regulations. Along with this, every condition of business with
capital invested by them is also required to mentioned in agreement.
 If any person or employee hired at the workplace then salary should be given from the
account of business rather than personal account of partners. Further, responsibilities of
every partner that who will complete which kind of tasks are also necessary to mention as
well as predetermine.
 If any one partner not fulfil and complete tasks assigned to him on time by which any
losses suffered by other partners. In that case, the particular person is responsible in order
to fulfil losses suffered by others as per acts and laws of partnership (Zhu and Zhu, 2016).
In the current question, there are some conditions and cases are given which possess
different form or structure of business. Among them all, one is considered as partnership in legal
manner. Further, analysis of such all the scenarios provided below:
A). As per the case of John and David, they started business of selling ducks in the
market. In this, Davis is highly efficient farmer due to which he completes breeding process of
ducks. Apart from this, John who is another partner is highly efficient in order to sale more
products or ducks in market and due to this he completes selling process. Herein, share of profits
and sales is clearly defined and mentioned which is legal. Along with responsibilities of John and
David are also clearly stated that one will produce and another will sale. Whatever cost incurred
to complete their specified procedures, for that particular aspect both responsible. As per the

legal laws all the things must be clear along with business should existed in the market. This
particular case fulfils all the terms and conditions due to which is deemed as partnership business
in legal manner (Eddy, 2017).
B.) Under the second case of Paul who is plumber and runs business in market where
equipments and business both are on his name. After that, Paul hires or recruits an employee who
is Matt at the workplace in exchange to $500 salary and $150 bonus amount per week. This
amount will be paid if the company generates sales at least worth of $5000 or more every week.
It will be not considered as partnership because Paul is owner and Matt is employee.
C.) According to the case of Tory and James who agree to establish a restaurant with a
name i.e. “Sweet Alex”. Herein, terms and conditions are clearly mentioned that Tory will be
chef of the restaurant and net profit will be received in proportion of 60:40. The thing left in this
case as per legal laws that, company not established and operated in the market yet. Due to not
comes into existence in the market legally it not possesses title of partnership business.
D.) In accordance with the current stated case, a person Louie holds business for run and
operate in market in trust for two partners who are George and Peppa. Further, net profit earned
by the organisation is to be distributed among both the partners in equal proportion at the end of
every financial period. Herein, profit or income of Louie is not mentioned as well as he operates
business or other partners (Gaillard, 2014). Therefore, as per the legal laws also this case not
comes into consideration of partnership business legally.
E.) At the end, fifth case is based on Chris who resisters his firm with the name of Chris
Pty Limited. By this organisation, Chris operates in stockbroking firm where it listed in stock
market and provides dividend amount to shareholders at the end of every fiscal year. As the
name i.e. Pty Ltd clearly expressed that it is one kind of Proprietary company where cannot be
considered as partnership firm. Along with this, as per the characteristics it can be clearly
determined that at here any other partner is not involved.
Hence, it can be concluded from all the cases and applicable rules of partnership that,
business of John and David deemed a partnership company. The reason is that, all the rules,
requirement, terms and conditions related to partnership are properly followed by John and
David to operate in market.

QUESTION 5
Concept of limited liability
Limited liability Company
It implies for the one in which interest of shareholders and partners are limited to the
extent to which amount invested by them. Hence, as per the section 516 of Companies Act,
(2001), shareholders or investors are not held accountable for company’s debt. Hence, in such
section of Companies Act, it is clearly mentioned that obligation of the shareholders are limited
to making payment of amount that is unpaid on shares (Limited Liability Company Legislation -
The Australian Experience, 2017). Nevertheless, if shareholder acts as a director then such aspect
or limited will be influenced from other aspects such as :
Director’s liability for Company’s debt [Sections 197, 344, 588G, 588J, 588M, 1317H]
On the basis of above depicted point and sections, a director of company is liable or
entitled for debt incurred by the company. It is when the business unity is unable to fulfill all the
debts which are due. In addition to this, a shareholder, acts as a director may be liable to
compensate all the losses from which company suffers. Along with the duty in relation to
fulfilling debts and compensating losses directors are also obliged to make payment of civil
penalty (Corporations Act 2001, 2017). Besides this, if company holds property on trust then a
director would be accountable to meet all the obligation that are due by company as trustee.
Director’s liability as guarantor/security over personal assets
In the matter of commercial activities and practices, banks and other creditors, which
provide business unit with monetary assistance, can ask questions from the director of a
company in relation to personal guarantee as well as security. For example: Bank asked to a
director in relation to giving mortgage over their house for securing the loan amount. On the
basis of such aspect, if bank would not able to repay the amount of debt or loan on time then
director may lose the house.

Thus, it can be presented that limited liability companies may be restricted by either
shares or guarantees. Further, in the context of partnership, limited liability implies that some
partners owe limited accountability in the venture or operations. In this, limited liability aspect
offers high level of protection to the partners in against to loss. Moreover, under unlimited
liability personal assets of partners are used to satisfy the claim of creditors. Thus, through
applying the concept of limited liability partners can protect their assets at the time of
insolvency.
Along with the partnership firm, concept of limited liability is also applicable on private
firms. Incorporated companies are treated as legal entity, so owner can be provided with limited
liability. From research, it has assessed that limited liability is especially desirable by the
companies which operate in the sector that imposes high level of loss, risk etc such as insurance
industry.
The concept of corporate limited liability is highly significant and provides high level of
assistance in insulating the investors from company’s debt. In the past years, several legal,
economic and social issues were occurred. Thus, with the motive to deal with such issues and
avoid the same concept of corporate limited liability was taken into consideration. Aspect of
limited liability encompasses two principles such as liability and contractual as well as fictitious
legal entity (The Future of Corporate Limited Liability in Australia, 2017). In this, first principle
entails that party may agree in relation to limiting their risk towards the obligations on which
they are recognized as part. In addition to this, second principle presents that fictitious legal
entity is considered as separate from an individuals who are using common law principle.
An entrepreneur which has business structure of limited liability is highly beneficial in different
ways. The reason is that it provide list of benefits and supports to the management in order to
operate in the market legally. Herein, some basic advantages of limited liability are described
below:
 Limited liability: As the name of business structure clearly implies that, liabilities of
members of the company with reference to debts as well as obligations is limited up to
the investment made by their own capital. Further, when any external party sue on LLC
firm then its personal assets such as bank accounts, property, plant etc. Protected.

Therefore, in case of suing by any other parties only monetary terms are lost by the LLC
where all the other assets and liabilities will safe (Advantages and Disadvantages of a
Limited Liability Company, 2016).
 Pass through taxation: Another benefit of limited liability is that, income or profit
generated at the end of an accounting period is to be treated in terms of personal income
of owners. Due to this condition, any kind of federal tax rates are not imposed on the
profit generated for which firms are liable in general. Therefore, LLC not has to pay any
kind of taxation amount to the government which helps to make it financially sound in
respective industry.
 Limitless ownership: In the market various business structures have specific limit that
specified number of people can be involved in the business. Further, more number of
people cannot deserve ownership of one company in other structures. The business form
of LLC provides facility for involving unlimited number of people and take ownership of
LLC.
 Allocation flexibility: According to this benefit of limited liability, it is not necessary that
all the partners must come up with equal capital amount for opening a business. Along
with this, profits and losses whatever generated by the LLC at the end of business year
also not mandatory to allocate on equal basis (Dixon, 2017).
 Freedom in management: As per the standard corporations, herein, it is not needed to
have annual meetings, board of directors, strict requirements of book etc. These all the
things are up to the owners and time available with them. Hence, LLC structure provides
freedom for managing business to all the owners.
However, limited liability consists of some drawbacks as well along with some
advantages. In the above part benefits associated with limited liability are explained clearly.
Further, some limitations comprises with limited liability are stated below:
 Building capital: In order to raise required money for several business projects, standard
corporations easily able to issue shares in the market. However, for limited liability it is
little more typical as well as harder for finding investors in the market (Martinez, 2016).

Hence, for raising capital for business LLC has limited and go through harder process as
compared to other business structures.
 Higher fees: In order to file or apply for limited liability business structure, it has to pay
more charges in comparison to other companies or sole traders. Along with this, some
states impose yearly renewal charges which create financial burden on LLC businesses.
 Government regulations: On the business structure of limited liability, wide range of
rules and regulations imposed by government of the country. Further, herein, various
kinds of protections and safety afforded to this kind of business form. In addition to this,
banks, medical services firms, insurance agencies etc. are example of companies which
can be barred by LLC while filing in respective state or region. Hence, it can be said that
strict rules and laws are mandatory to follow by limited liability.
 Confusion across jurisdictions: Rules and regulations related to establishment of limited
liability firms differ from state as well as on the basis of jurisdictions (Been, Millett and
Sheikh, 2015). Due to this particular condition, wide range of laws and liabilities differ
which create high level of confusion among members. Along with this, taxation laws also
differ where sometimes LLC pays double taxation.
CONCLUSION
It can be articulated from the present report of business and company law that, Jacob and
Marley both are liable to pay amount to the members of club for the losses suffered by them.
Further, for John who wants to open a business for his partnership business structure is good.
The reason is that, it helps to distribute responsibilities and works along with only John not has
to raise capital for start the whole enterprise. As per the case of third part, Drryl is liable for lease
obligations, architects' charges as well as leg injury suffered by Glenda. Moreover, business of
John and David is considered as partnership business in legal manner. Justification behind this is
that, all the rules, regulations, terms as well as conditions related to partnership business are
followed properly by both the partners. At the end, limited liability is one of the best structure
among all the business structures for operating in industry in legal manner.

REFERENCES
Books and Journals
Been, J. V., Millett, C. and Sheikh, A., 2015. Smoke-free legislation and childhood
hospitalisations for respiratory tract infections. European Respiratory Journal. 46(3).
pp.697-706.
Campbell, E. and Boothby, C., 2016. University law clinics as alternative business structures:
more questions than answers? Edited by Francis King. The Law Teacher. 50(1). pp.132-
137.
Dimatteo, L. A., 2016. International Business Law and the Legal Environment. Routledge.
Eddy, T., 2017. The Judicial Review of the Responsibilities of the Company to the Payment of
the Money Guarantee the Death of Labor based on Law Number 24 the Year 2011 about
BPJS Employment. Journal of Social Science Studies. 4(2). p.201.
Gaillard, E., 2014. Transnational Law: A Legal System or a Method of Decision
Making?. Arbitration International. 17(1). pp.59-72.
Goldman, A., 2013. Business law: Principles and Practices. Cengage.
So, B. K. L., 2016. Business, Law and Education for Modernity. Routledge.
Zhu, Z. G. and Zhu, W. Z., 2016. A Historic View of the US Business Ethical Laws and
Implications for Developing Countries like China. Review of European Studies.8(3). p.49.
Online
Advantages and Disadvantages of a Limited Liability Company. 2016. [Online]. Available
through: <http://blog.lawkick.com/advantages-disadvantages-limited-liability-company/>.
Corporations Act 2001. 2017. [Online]. Available through: <
https://www.legislation.gov.au/Details/C2017C00129>.
Dixon, C., 2017. Why Start an LLC? Limited Liability Company Advantages and Disadvantages.
[Online]. Available through: <https://www.rocketlawyer.com/article/why-start-an-llc-
limited-liability-company-advantages-and-disadvantages.rl>.
Elements of Negligence. 2017. [Online]. Available through: <
https://www.mccormickmurphy.com/diy/liability/negligence/>.

Elements Of Tort Of Negligence. 2017. [Online]. Available through: <
https://www.lawteacher.net/free-law-essays/medical-law/elements-of-tort-of-negligence-
medical-law-essay.php>.
Limited Liability Company Legislation - The Australian Experience. 2017. [pdf]. Available
through: < http://law.unimelb.edu.au/__data/assets/pdf_file/0010/1679905/201351.pdf>.
Martinez, R., 2016. Limited liability company: Advantages and disadvantages. [Online].
Available through: <http://www.versiondaily.com/limited-liability-company-advantages-
disadvantages/>.
Partnership Act 1963. 2015. [Pdf]. Available through:
<http://www.legislation.act.gov.au/a/1963-5/current/pdf/1963-5.pdf>.
Partnership Act 1963. 2017. [pdf]. Available through: <
http://www.legislation.act.gov.au/a/1963-5/current/pdf/1963-5.pdf>.
Partnership Act. 2010. [Online]. Available through:
<http://nslegislature.ca/legc/statutes/partner.htm>.
Partnership. 2017. [Online]. Available through:
<https://legal-dictionary.thefreedictionary.com/partnership>.
Remedies in Tort Law. 2017. [Online]. Available through: <https://www.legalmatch.com/law-
library/article/remedies-in-tort-law.html >.
The Future of Corporate Limited Liability in Australia. 2017. [Online]. Available through:
<http://epublications.bond.edu.au/cgi/viewcontent.cgi?article=1088&context=blr >.
Tort laws. 2017. [pdf]. Available through: < http://www.lawvision.com.au/uploads/PDFs/Tort
%20Law%20.pdf>.