Contract Law and Partnerships: A Comprehensive Review

This assignment provides a comprehensive review of contract law and partnerships, including case studies, research articles, and book chapters. The documents cover various aspects of contract law, such as the performance implications of repeated partnerships, the effects of contract structure on trust and collaboration, and the supply-side determinants of loan contract strictness. The assignments also discuss public-private partnerships, conceptually analyzing approaches to meanings and forms. The provided list includes references from top journals like Academy of Management Journal, Journal of Youth Studies, and International Small Business Journal.

LEGAL ASPECTS OF
BUSINESS
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Table of Contents
Task 1..............................................................................................................................................3
Introduction.................................................................................................................................3
Critical discuss the main feature of unlimited partnership and private limited companies .......3
Advantage and disadvantage of unlimited partnership...............................................................4
Advantage and disadvantage of private limited companies .......................................................4
Conclusion ......................................................................................................................................5
TASK 2............................................................................................................................................6
INTRODUCTION...........................................................................................................................6
Duty to the act within the power (section 171 Companies Act 2006)........................................6
Duty to promote the success of the company (section 172 Companies Act 2006).....................7
Duty to the exercise independent judgement (section 173 Companies Act 2006).....................7
CONCLUSION................................................................................................................................8
REFERENCE ................................................................................................................................10
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Task 1
Introduction
There are different forms of business organisation that are a partnership, sole
proprietorship and corporation. An unlimited partnership is an arrangement through which two
or more persons agree to share in all assets, profit and financial and legal liabilities of a business.
In unlimited partnership company, all partners have unlimited liability which means that all their
personal assets are liable for the partnership’s obligation (Warner and Sullivan, 2017). On the
other side, a private limited company is a help privately and liability of owner is limited. Along
with this, their number of members should not exceed more than 50. The present task will cover
the main features of an unlimited partnership and private limited companies. Apart from this,
advantage and disadvantage of private limited will be explained.
Critical discuss the main feature of unlimited partnership and private limited companies
An unlimited partnership provides a relatively simple way for two or more people with
respect to own and manage the firm together. General duties under companies act 2006, to
accomplish success of the firm for benefits company members (Perkman and Schildt, 2015).
Along with this, the director should avoid conflicts of interest within the firm Under this business
each partner their skills, capital and time. There are some key features of unlimited partnership
that are as follows:
The share of risk and rewards: In unlimited partnership, all the profit and risk are shared
equally. As no individual is liable for particular risk when it occurs within the firm (Kitching, J.,
Kašperová and Collis, 2015). As all partners contribute to business so they are liable for each
activity carried out by the firm.
The share of profit: Each partner is liable to share the net profits which are earned by the
firm. Along with this, a contract needs to be provided for equal shares and it is also depended on
the investment done by partners within the firm (Holloway and Parmigiani, 2016).
Liability, without limit: While working in partnership, all the partners are responsible for
all the debts and obligation of the business without any limitation. It also includes all the
damages which take place due to wrongful act and omissions of other partners.
A private company is that company which is help privately and it has a separate legal
entity. Under this shareholder cannot trade publicly shares. No shares can be sold out with
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permission of shareholders (Gutierrez, Boukrami and Lumsden, 2015). In private limited
company, there are maximum 2 directors appointed and they do not need to appoint by
independent directors. Liability is held by an individual as the total amount of shares which are
held by the firm (Albers, Wohlgezogen and Zajac, 2016). Contrasting partnership, there will be
no risk on the assets of a shareholder and they do not need to may more amount as compared to
the value of shares they hold. It is essential for the private limited company to use the world
private limited after their firm name.
Advantage and disadvantage of unlimited partnership
There are many sole traders who are forming private limited firms every day in order to
protect themselves against from trading in ever-changing economic climate. There are some
limitation and benefit of general partnership firms that are as follows:
A general partnership has no separate legal existence which is different from its partner.
Contrasting to this, a private limited company it does not need to be registered at or make regular
filings to the firm house which can hold keep things simple (Alcácer, Cantwell and Piscitello,
2016). All the profit earned by the firm is shared equally between business partners. One of the
main advantages is that they do not need to pay tax. Along with this, each partner registers their
profit and loss of the firm on their own personal income tax return (Hardgrove, McDowell and
Rootham, 2015). There are chances that assets can be raised by partners if there are more than
two partners. Along with this management can be improved with there is more than 1 owner. On
the other side, some of its disadvantages are that if risk or damage takes place due to one partner
mistake then other partners also bear losses. A partner cannot transfer their interest in the firm
without the common agreement of all the partners (Mouraviev and Kakabadse, 2016). All
decisions are made by partners and all the issues are solved which are faced by company.
However, disagreement is one of the common problem in partnership case it is so because one
may not agree with other partner ideas for carrying out the business.
Advantage and disadvantage of private limited companies
In private limited companies, there is a restriction to transfer the shares to another person.
further private limited company can easily establish by two members and all daily activities are
carried out by the directors (Warner and Sullivan, 2017). The advantage of the private limited
company is that members know the way to handle each other and the way of controlling owner’s
capital. There is a number of directors in private limited firm is maximum 2 and it needs to be
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registered as per laws and legislation. One of the main disadvantages is that there us restriction
on transfer of shares. Along with this, a number of the member should not exceed more than 50.
There is so much time required to set up a new company. Along with limited liability firm also
gain tax benefit. All the losses and profit are bear by the owner itself as no other person is liable
for the risk (Cuervo-Cazurra, Inkpen. and Ramaswamy, 2016). Private limited company or
PLC,s are very profitable but these all profits can be diluted because they are distributed among
all their shareholders and there are many private limited company who have up to 50
shareholders. In order to create private limited firm owner, need to invest high amount and they
also need to pay taxes, employee’s insurance, and legal. In private companies any break of
duties can result in court interference. The director of the firm is answerable for the company and
its profit through making asset of the position which they hold as a director of the firm. It is one
of the strict rule and complete principal (Bolton and Foxon, 2015). The court have made their
position clear on the issue of earning profit from position which is held by them in firm of good
faith which is clear in the case of Bray v Ford Lord Herschell.
Conclusion
From the above task it is concluded that in unlimited company there are number of
partners are more than 1. All the risk and profit are shared between them equally due to which no
one partner need to bear all the losses. There are some benefits of unlimited company such as
unlimited liability can be raised by partners without any restriction. On the other side in private
limited company is carried out privately in which number of directors can be maximum 2. All
the shares are strictly forbidden from being publicly traded. Further it is concluded that, there are
some benefits of being private limited as all its shares are not available to the general public for
buying and selling purpose. Private company need to pay higher taxes as compared to
partnership. However, unlimited company can avoid the chances of double taxation.
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TASK 2
INTRODUCTION
In an organisation there is a great responsibility of the company director regarding the success
and business activities of the organisation. The director of the organisation plays a very crucial
role within an organisation who have several kinds of the roles and responsibility regarding the
business activities An endless association gives a reasonably essential way to deal with no less
than two people concerning case and manage the firm together. The manager has great power
regarding the promotion and business operation through which he/she is liable to address the
objective (Van der Puil and Weele, 2014). He/she has to follow all regulation and legislation
which developed by the government regarding the business enterprise and practices. The power
and ownership is also decided by the government which have to follow by the company.
General commitments under associations act 2006, to accomplish achievement of the
firm for benefits association people. Close by this, the director of company should keep up a vital
separation from hopeless circumstances inside the firm Under this business every accessory their
capacities, capital and time unlimited association there are number of accessories are more than
All the peril and advantage are shared between them comparably due to which no one associate
need to hold up under each one of the incidents. (Sumner and Williams, 2010.) There are a
couple of points of interest of endless association, for instance, endless hazard can be raised by
accessories with no restriction.
Duty to the act within the power (section 171 Companies Act 2006)
What constitutes a honest to goodness reason must be scholarly concerning the specific
condition under idea. This commitment characterizes the official's commitment to take after the
association's constitution (Stone, Devenney and Cunnington, 2011). The constitution is described
with the true objective of the general commitments in territory furthermore the association's
articles of alliance it consolidates:
• decisions taken on the basis of the set regulation and norms
• diverse decisions taken by the people if they are to be managed by judiciousness of any
authorizing or represent of law as decisions of the association, for example a decision taken by
easygoing steady consent of the impressive number of people.
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This commitment orchestrates the present standard of law under which a director of company
should rehearse his powers according to the terms on which they were indeed, and do all things
considered for a true blue reason. As per this law all power of carry out the business activities
and function are in the hand of the director so it is very important to understand this legsilation in
order to carry out business in more effective and efficient manner. Director is agent of
corporation as per this law who takes each and every decision regarding the business.
Duty to promote the success of the company (section 172 Companies Act 2006)
This commitment systematizes the present law and values in statute what is normally implied as
the rule of "lit up speculator regard". The commitment requires an official to act in the way he or
she considers, in consistence with normal conventionality, would be well while in transit to
propel the accomplishment of the association for the upside of its people all things considered
and, in doing in that capacity, have regard to the parts recorded. This once-over isn't exhaustive,
yet includes zones of particular centrality which reflect more broad wants of tried and true
business lead, for instance, the interests of the association's delegates and the impact of the
association's exercises on the gathering and the earth (Rush and Ottley, 2010). The decision with
reference to what will propel the accomplishment of the association, and what constitutes such
accomplishment, is one for the official's awesome certainty judgement. This ensures business
decisions on, for example, framework and procedures are for the director of company, and not
subject to decision by the courts, subject to incredible certainty. As per this act it is also a great
responsibility of the director in the private limited and limited company to promote the company
success (Ramanathan, 2014). The director have work within the organisation with the pure soul
and heart and full fill all responsibility regarding the business so as determined objective can
address. In addition to this, as per this act, director have to follow the all regulated rules,
regulation and norm which have developed by the government of country at the time of taking
appropriate decision of the business. They have to work only for address the high level of
outcome and success in the market. He/she is also liable to develop the such strategy, policies
and practices through which they can compete with rival in the competitive business
environment.
Duty to the exercise independent judgement (section 173 Companies Act 2006)
This commitment systematizes the present control of law under which director of company must
exercise their powers self-rulingly, without subordinating their powers to the will of others,
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paying little heed to whether by assignment or something different (Malhotra and Lumineau,
2011). The territory gives that director of company must not chain the future exercise of their
attentiveness unless they are acting:
According to an assention which has been legitimately gone into by the association; or
In a way endorsed by the association's constitution.
According to Section 173 of Companies Act 2006, Directors of company posses independent
powers to formulate and implement effective strategies or make decisions in good faith of the
company without subordinating their powers to the will of others (McKendrick, 2014). As per
this act, the entire power of the taking decision are in the hand of the director of the company
through which he/she can survive the entire business activities and function. In the absence of the
manager and leader within the company organisation c an not able to full fill the objective.
He/she have all authority to taking the decision regarding the making policies, practices and
strategy regarding the business activities and function. The section gives that directors must not
fetter the future exercise of their discretion unless they are acting in accordance with an
agreement which has been duly entered into the company(Oya, 2012). As per this section, the
directors of the organisations possess powers and authorisation where they independently make
any decisions for the betterment of the organisations as well as its shareholders and stakeholders.
A director have to work and delegate his or her power as per the constitution of the company.
For private limited companies, the director can delegate their powers in accordance with the
articles. The act mandates that directors must exercise their powers in accordance with the
constitution of the company (Murfin, 2012). They can formulate and implement the decisions in
order to enhance the productivity and profitability of the organisation. The act helps the director
to formulate policies and regulations without considering others in order to improve the
company's performance. Thus, the section helps in providing powers to the director where they
can independently make decisions and forms policies.
The commitment does not give a power on the administrators to assign, nor does it shield a
director of company from rehearsing a vitality to dole out exhibited by the association's
constitution given that its action is according to the association's constitution. Under the draft
show articles of relationship for exclusive organizations confined by shares, the officials may
delegate their abilities according to the articles.
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CONCLUSION
From the entire discussion it has been concluded that there are several kinds of power
and responsibility to the director of private limited and partnership organisation. Directors of
company posses independent powers to formulate and implement effective strategies or make
decisions in good faith of the company. They have power top take the all decision regarding the
policies, strategy and practices and also they have responsibility to promote the success of the
company.
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