Company Law Case Study on Partnership Act in Australia

Running Head: COMPANY LAW 0
COMPANY LAW
AUSTRALIA
[DATE]
PARTNERSHIP ACT
[Company address]

COMPANY LAW 1
Issue 1
The major issue in this case study is that can Violet be considered as partner?
Rule 1
Accordance with section 1 of the Partnership Act 1892 NSW which while clarifying the
definition of partnership stated that it is that relation between the persons who are carrying on a
business for earning profit and it further also includes an incorporated and limited partnership.
Whereas section 2 of the same act emphases on the rules which can determine the existence of
partnership between two parties such as Joint tenancy rule 1 s 6(1) there must exist a joint
ownership rather than that of self-satisfactory, sharing of the gross returns rule 2 s 6(2) there
must be some evidences relating to the existence of the partnership, receiving shares in the
business profits rule 3 s 6(3) sharing of profit is the basic or the main evidence which suggests
the existence of the partnership. Section 28 suggests that all the partners must also have a share
in the loss of the firm. Section 24 determines the duties which are to be accomplished by all the
partners in a partnership firm Canny Gabriel Castle Jackson Advertising Pty. Ltd. v. Volume
Sales (Finance) Pty. Ltd. (1974) 131 CLR 321, in this case the relationship between the partner
and partnership was discussed and a healthy definition for partnership was set.
Application 1
In the given case study it was seen that Violet agreed to lend his loan for getting a share
in the partnership for $20,000 in exchange of a loan agreement having the following terms i.e.
20% share of loses and profit will be shared with the lender, he could also have the right to
inspect the books of partnership at its own will, can also attain the quarterly statement of
business and lastly if the money is advanced for paying off the loans, the lender cannot be
considered as a partnership. This shows that all the elements of the definition of partnership was

COMPANY LAW 2
meet as was there in the case of Canny Gabriel Castle Jackson Advertising Pty. Ltd. v. Volume
Sales (Finance) Pty. Ltd .Violet had signed the document relating to loan prepared for giving
advance money prepared by Rose. Thus it is clear that agreement was signed by Violet, where he
had agreed to share the liability. The deed was formed between the two parties which cannot be
further disagreed by Violet by stating that he had not undergone all the clauses of the agreement.
Conclusion 1
Hence to sum up with the case study it can be stated that Violet can be considered as a
partner to business of the shop. As all the terns of creating a valid partnership are being meted
here.