Corporation and Business Structure: Liability and Fiduciary Duties

Running Head: BUSINESS AND CORPORATION LAW
0
LAWS20059
Corporation and business Structure
8/15/2019
Student’s Name

Business Structures 1
Contents
Part A...............................................................................................................................................2
Part B...............................................................................................................................................4
Part C...............................................................................................................................................6
Bibliography..................................................................................................................................10
Books/Journals 10
Case Laws 10
Legislations 10
Other Resources 10

Business Structures 2
Part A
In the presented case, two persons want to start the restaurant business under partnership
structure whereas one other supports to the partnership. The lead concern of three of them is
regarding the risk of legal actions that third parties may initiate against them or the business.
This is to state that both the business structure i.e. partnership and company carries different risk
when associated people deals with third party or an outsider. In case of a partnership, partners are
there to manage all the business activities and affairs whereas in case of company directors do
the same. This is to mention that a partnership firm does not have distinct identification from
partners. This is the reason that partners are equivalent to the partnership firm and when a person
makes a deal with the partnership firm, he/she enters into a deal with partners of the firm.
Partners of the firm have a great responsibility in respect to their business because of no separate
legal entity and in Australia; partnership firm of different states outlines such liability. Provisions
of partnership acts of different states are almost the same. Partnership Act1 is the legislation,
which contains partnership law for Queensland State. The connection of partners of the firm with
third parties is mentioned under part 2 of chapter 2. As mentioned, a partner is an agent; section
8 of the act confirms the capacity of a partner to bind firms and other partners by his/her act. This
section states that other partners and firm becomes liable towards third parties for those tasks that
a partner do under the limit of given authority and those are related to firm's business. An
outsider may sue the firm as well as to any other partner in such a situation. Similarly, section 9
states that firm and other partners, are accountable for the acts done in the name of firm2. Section
12 of the act further ensures that for the debts and other liabilities of a firm, every partner
1 Partnership Act 1981 (Qld).
2 Legislation.qld.gov.au, Partnership Act 1891 (Web Page, 28 May 2012) <
https://www.legislation.qld.gov.au/view/pdf/inforce/current/act-1891-007>.