Corporations Law

Running head: CORPORATIONS LAW
Corporations Law
Name of the Student
Name of the University
Author Note

1CORPORATIONS LAW
Partnership indicates a business structure that has been established for the purpose of
exhibiting the business operations. In case of carrying out business function partnership is
similar to the other forms of business structures such as companies, sole proprietorship and
other forms of business. In the territory of Australia, there are several definitions relating to
partnership. It has been defined in several legislation that are existed in the territory of
Australia. Australia has several partnership legislations prevailing and governing the
partnership business in different states. However, the state of Victoria has a legislation
governing partnership applicable to the relationship of partnership in that statement. The
Partnership Act 1958 (Vic)1 is the legislation that governs any partnership business prevailing
in Victoria. All these legislations and definitions points out towards certain basics the
required to be contained in a partnership business to be rendered as partnership. For instance,
partnership is required to be carried out on the basis of an agreement between the partners.
This agreement should have the status of a valid contract and should be consisting of all the
elements that are required to form a valid contract. Another chief requirement for the
formation of a partnership is the presence of two or more individuals who has the intention of
running a common business and has been initiated their relationship as partners by way of a
valid contract. In this regard, the partners are treated as parties to the contract of partnership.
Moreover, a partnership should always be created for the purpose of earning profit. The last
requirement of a partnership to exist is the agency relationship that has been created between
the partners by the of the contract of partnership.
Issue
The most important issue that can be identified from the present scenario is whether there
exist any partnership relationship between Mary, Rose, Violet and Sonny u/s 5 of the
Partnership Act 1958 (Vic)2. The determination of this issue is required for the purpose of
1 The Partnership Act 1958 (Vic)
2 The Partnership Act 1958 (Vic), s. 5

2CORPORATIONS LAW
determining the status of Mary, Rose, Violate and Sonny in the given situation. For the
determination of status under the relationship of partnership, the application of all the
elements belonging to the partnership will be applied to the given set of situations u/s 6 of the
Partnership Act 1958 (Vic)3.
Rule
In one of the definition provided by the courts with respect to the relationship of
partnership is that it is an association that has been formed between individuals who are
involved in the activity of business and the chief intention of the indulging into such
relationship and carrying out the business operations is the generation of profit. For the
formation of a partnership the institution of a contract needs to be established between the
parties for effecting such a relationship and this contract needs to have the legally binding
force and contractual nature. Even if no legal relation has been created, the partnership can be
formed, if there is an existence of a participation, which is mutually contributed. This can be
illustrated with the case of Kendall v. Hamilton, 4 App. Cas. 504, 544 (1879)4. It has been
held in the case of Elkin & Co Pty Ltd v Specialised Television Installations Pty Ltd [1961]
SR (NSW) 1655, that the most important requirement of a partnership is the existence of two
or more partners and a business operation carried out for the main aim of generating profit
and distributing the same in accordance with the agreement. The relationship between the
partners is required to be mutual while carrying out the business under the name of the
partnership and each of the partners shows a fiduciary relationship with the other partners as
well as with the partnership form as has been provided under section 13 of the Act6. This
comes in line with the case of Ex parte Board of Trade (1890) 60 LJQB 2357. The Partnership
3 The Partnership Act 1958 (Vic), s. 6
4 Kendall v. Hamilton, 4 App. Cas. 504, 544 (1879)
5 Elkin & Co Pty Ltd v Specialised Television Installations Pty Ltd [1961] SR (NSW) 165
6 The Partnership Act 1958 (Vic), s. 13
7 Ex parte Board of Trade (1890) 60 LJQB 235