Document on Partnership Business

Added on -2020-02-24

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Solution – Question No.1
Partnership is an association between two persons agreed to do business and
share the profit or loss arising from doing such business. The people involved in
business are called Partner1. The business can be carried out by all the partners
or any one partner with the consent of other partners. Partnership is a voluntary
contract between two persons or more formed with the motive to make profits
by sourcing the money and the skills with themselves for carrying out the
business2.
Under the course of conduct, each partner in a partnership firm is responsible for
the following duties and responsibilities3
In terms of Common target and faith:-
Each partner should work and do business with an aim of a common
target.
Each partner should be loyal to other partners.
Each partner should use his or her at most skill while performing for the
business.
Each partner should render an account which is true and complete.
All information regarding the business need to be evenly communicated to
all partners.
In terms of indemnify:-
Each partner should indemnify the firm for the fault or negligence on their
part during the conduct of the business.
In terms of diligent
Each partner need to do hard work using their at most skills during the
conduct of the business. The inefficiency of one of the partner’s
performance will affect the Partnership as a whole4.
In terms of earnings
Each partner is entitled to share the profits or loss made out of the
business. They don’t have any rights to get separate remuneration for the
duties they do for the firm. In some cases wherein one partner works for
the business and others are silent partners5, then separate remuneration
can be paid to such active partner with the consent of all other silent
1 Petty, J. William, et al. Financial management: Principles and applications. Pearson
Higher Education AU, 2015.
2 Vivoda, Vlado. "Australia and Germany: a new strategic energy partnership." (2017).
3 Latimer, Paul. "Repudiation of Partnership Contracts." (2016).
4 Muzio, Daniel, et al. "Bad barrels and bad cellars: a ‘boundaries’ perspective on
professional misconduct." (2016): 141-175.
5 Latimer, Paul. "Repudiation of Partnership Contracts." (2016).
partners. The active partner is entitled to claim the profits apart from this
separate remuneration6.
In terms of personal profits earned
If a partner gets personal profits by using the name or property of the
firm, then the partner should share such profits with all the other
partners7.
In terms of sharing losses
Every partner should share the losses arising out of business just like they
share the profits8.
In terms of sharing the Liability
Every partner is implied by the Partnership act to take care of the
liabilities arises from the conduct of the business at all situations9.
Solution – Question No.2
2.1) Earl has incorporated a company on 12th December 2016, naming the
company as Spectacular Pty Limited. Earl wants to attach a business name to
Spectacular Pty Limited calling “Spekkie events”.
Australian Securities and Investment Commission is a government body in
Australia that controls the Australian Corporate Regulations. ASIC is the short
form of Australian Securities and Investment Commission and works under
Corporation Act 200110.
ASIC registers business names under the Business Names Registration Act 2011.
One of the main activities is to make information about the companies and other
bodies to the public so as to help the public to understand about the
performances of such companies. It will be useful and timely information for an
investor11.
In the given case, Earl can very well attach a business name for his existing
company Spectacular Pty limited12.
6 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases
and materials." (2015).
7 Latimer, Paul. "Repudiation of Partnership Contracts." (2016).
8 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases
and materials." (2015).
9 Vivoda, Vlado. "Australia and Germany: a new strategic energy partnership." (2017).
10 Muzio, Daniel, et al. "Bad barrels and bad cellars: a ‘boundaries’ perspective on
professional misconduct." (2016): 141-175.
11 Petty, J. William, et al. Financial management: Principles and applications. Pearson
Higher Education AU, 2015.
12 Vivoda, Vlado. "Australia and Germany: a new strategic energy partnership." (2017).
ASIC allows a company to have two names namely one for legal and another for
business. But both the names need to be registered under ASIC regulations and
linked to one ABN13. (Australian Business Number)
Legal name of a company appears in all official documentations. Legal
name can be difference from the business name.
Business name of a company appears in all business operations
requirements.
Legal Process
The suggested name of a company should not be in the list of
undesired category of names or
Includes restricted words or expressions14.
The list of undesired category of names includes the Crown, Commonwealth
Government, State Territories, municipal or local authority, Government of
foreign country, a member of Royal family, charitable organisations, and ex-
service personnel, Don Bradman, Mary MacKillop or the United Nations. The
name of the company should not do any destruction to the public or to the
Government. “Fedral or Commonweal” does not figure under undesired category
of names15.
The list of words or expressions includes ADI, Bank, Bankers, Building societies,
Credit society, Credit Union, Universities, Red Cross, Red lion and Sun16.
If name suggestion is not the undesired category of name or restricted words or
expressions the application for the name of the company is processed by the
authorised AISC officer. However, Minister, being the Parliamentary Secretary to
the Treasurer can make a determination that a business name is available for
registration, even though it is undesirable. The Minister has delegated the power
to make a determination to certain senior ASIC officers.
To conclude Earl can have two names subject to the registration of both names
with ASIC. The names can be categorised under the following heads.
Legal Name :- Spectacular Pty Ltd
Business Name :- Spekkie Events
2.2) Corporate listing and its problems
Corporate disclosure is an important factor in money or financial markets.
Integrity in such disclosure is the problem area to be addressed. The corporate
13 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases
and materials." (2015).
14 Muzio, Daniel, et al. "Bad barrels and bad cellars: a ‘boundaries’ perspective on
professional misconduct." (2016): 141-175.
15 Muzio, Daniel, et al. "Bad barrels and bad cellars: a ‘boundaries’ perspective on
professional misconduct." (2016): 141-175.
16 Vivoda, Vlado. "Australia and Germany: a new strategic energy partnership." (2017).

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