Formation Of Business Law And Management

Running head: BUSINESS LAW
BUSINESS LAW
Name of the Student
Name of the University
Author Note

BUSINESS LAW1
MEMO 1
To: Jo Delaney
From: [To be filled in by the student]
Date:
Subject:
Issue
The primary issue is which form or structure relating to business shall be best suited to
the needs of Win, Nick, Mick and Ying.
Rule
It must be mentioned that certain factors must be considered during the formation and the
management of a business. Such factors include distinct legal entity, transferability of the
interests of the owner, capability to secure finance, control and management, plans for growth,
resolution of disputes and planning relating to taxation.
A partnership is considered to be a relationship among certain individuals who have
decided to carry on any particular common business. The partners shall share the similar
intention of earning revenues and profits. The partners in relation to any partnership business
may be either individuals, or bodies corporate, or companies. Each partners regarding the
business establishes a specific contract, which is known as the partnership agreement. This
particular agreement states the guidelines according to which the partners should conduct the
business of their partnership. Except when a contract or any statute is in existence to the
contrary, the common obligations and rights in relation to each partner shall be directed by the

BUSINESS LAW2
agreement mentioned above. A partnership is regarded as a relationship, and it is not considered
to be a distinct legal body, although, for the purposes of procedural suitability and expediency,
the rules in connection to Court permit any particular partnership to be sued or sue in the name of
the partnership firm. The partnership should file a tax return in order to determine the share of
loss and profit in relation to each partner1.
Section 115 as provided in the Corporations Act (Cth) of the year 2001 permits any
particular partnership to have a quantum of twenty members at the most, however, exceptions
exist in this regard in case of professional service providing partnerships, such as accounting
firms and law2. Each partner shall be privately accountable to the outside creditors in relation to
the entire quantum of the debt, as a partnership is not considered to be a distinct legal body. Each
partner shall act as an agent of the firm as well as the agent for all the other partners in that
particular firm. The partners shall be personally accountable, which may include their assets.
However, in case of a limited partnership, certain partners enjoy a limited accountability towards
the partnership firm.
In the case of Birtchnell v Equity Trustees, Executors and Agency Co Ltd [1929] HCA
243, it was stated that an important belief or standard in relation to the law of partnership is that
any particular partnership shall be considered to be a fiduciary relationship, which should be
grounded and established on mutual confidence and trust among the partners.
A non-profit or not-for-profit association is considered to be a group of either two
individuals or more than two individuals, all of whom have reached an agreement for the
purposes of joining together in order to follow a certain kind of shared lawful purpose. Such
1 Klatt, Gosia, Teresa Angelico, and John Polesel. "Emerging partnership practices in VET provision in the senior
years of schooling in Australia." (2018) The Australian Educational Researcher 45.2: 217-236.
2 Corporations Act, 2001 (Cth).
3 Birtchnell v Equity Trustees, Executors and Agency Co Ltd [1929] HCA 24.

BUSINESS LAW3
shared objective may include sporting or social clubs, learned and artistic societies, professional
and trade associations, either religious or charitable or educational organizations, and
associations that may be formed in order to promote any kind of environmental, cultural or other
similar purposes with the intention to do good for the community. Contrary to partnerships, the
purpose of a non-profit association is not to do business and earn profits for the partners, instead
the profits that are earned from a non-profit organization should be utilized for the objectives of
the association4. In the case of Wise v The Perpetual Trustee Company Limited (Executors of WH
Paling (deceased) (New South Wales) [1903] AC 1395, it had been stated that in case of non-
profit organizations, regarding the accountability of the ordinary members, it may be restricted to
the amount or quantum of the entrance or the subscription fees. However, if the rules are binding
in the legal sense and the members have decided to take greater accountability, then the members
shall be bound by the increased accountability. It must be mentioned that there is no presence of
a distinct legal body in case of an unincorporated association. However, if an association is
incorporated then it shall be considered as a distinct body corporate, and shall be included in the
Associations Incorporation Act.
The companies are popular they certainly deliver several advantages in relation to the
context of the business, for instance, limited liability, succession planning, taxation
considerations. Companies should be registered as per the Corporations Act (Cth) of the year
2001. The variations in relation to the type of companies depend on the accountability of the
members. In case of proprietary company there shall be only one director, and the shareholders
shall be no more than fifty, unlike the public companies, where the quantum of directors shall be
4 Gilchrist, David, and Robyn Pilcher. "The intention and the reality: A commentary on the not-for-profit reform
Agenda in Australia." (2018) Public Sector Accounting, Accountability and Governance. Routledge, 118-129.
5 Wise v The Perpetual Trustee Company Limited (Executors of WH Paling (deceased) (New South Wales) [1903]
AC 139.