Assignment on Corporate Law

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Running head: Corporate Law1Corporation Law AustraliaStudent Name:Institution:
Corporate Law2Question oneFactsHarry Spencer,a long-time client of Charles Windsor & Sons Solicitors, gave CharlesWindsor III some money to invest on his behalf. Harry had dealt with the firm forconveyancing and other matters. For conveyancing he always dealt with Meghan. He hasdealt with Meghan since Charles Windsor II and even after the death of Charles Windsor II.He trusted Meghan and considered him the cornerstone of the firm. The firm has retainedMeghan and Rachel Engleson as salaried partners; their names also appear on the firm’s letterhead. Charles has misappropriated Harry’s funds. Harry now claims that Meghan and Rachelare liable.IssueThe issue is whether Meghan and Rachel are liable.RulePartnership exists between people in a common business to make profits1.Sharing ofprofits is consideredprima facieevidence of existence of a partnership2. However, sharing ofprofits alone is not proof of a partnership3.Once partnership is established to exist, all the partners are liable for all liabilities andobligations of the firm4. The law also allow third parties to recover from other persons whoare not really partners but have held themselves out as partners either by words or conduct5.This is doctrine of estoppel6.Lynch v Stiff7, is a case with similar facts, the court found Lynchliable as a partner despite the fact that Lynch was not really a partner. It was stated that forthere to be a partnership by holding out the person must have knowingly represented himself1Partnership Act of 1985 (WA)s. 7(1)2Partnership Act of 1985 (WA)s. 8(3)3Partnership Act of 1985 (WA)s. 8(2)4Partnership Act of 1985 (WA)s.165Partnership Act of 1985 (WA) s. 216Deards,Practice Notes on Partnership Law(Cavendish Publishing, 2013) 437Lynch v Stiff(1943) 68 CLR 428
Corporate Law3as a partner, another person had acted on that representation and dealt with the firm on thefaith of that representation. InNationwide Building Society v Lewis8, Nationwide sought torely on the doctrine of holding out to make a solicitor liable. The solicitor had been employedunder a salaried partner contract. The name of the solicitor also appeared on the firm’sletterhead. It was held that there was no partnership as Nationwide failed to prove that theyrelied on the solicitor’s status to transact with the firm. InBriggs v Oates9even though thedefendant was held out as a partner he was not really a partner because he had not share inthe firm’s profit no liability was apportioned to him.AnalysisThe names of both Meghan and Rachel appearing on the firm’s letterhead held themout as partners asLynch v Stiff.Harry has never worked with Rachel and cannot attest to hercompetence. However, he has worked with Meghan and has developed trust in Meghan. Heconsiders Meghan to be the cornerstone of the firm. He dealt with the firm because of histrust in Meghan and belief that Meghan is a partner.ConclusionHarry has a cause of action against Meghan but not against Rachel. Rachel’s holdingout had no influence on his decision to deal with the firm.Question Two (a)FactsDown Under Pty Ltd owns a chain of bookstores. Its directors and members areRydell, Danny, Frenchy and Putzie. It relies on replaceable and its constitution. Thecompany’s directors received an invitation from Top End Pty Ltd to attend a launch of a newbook. However, they were unable to attend and Zuko, the company’s accountant, attended on8(1998)3 All ER 1439(1990)1 CR 473
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