Report to Supervising Partner Assignment 2022

Running head: REPORT TO SUPERVISING PARTNER
Report to Supervising Partner
Name of the Student
Name of the University
Author Note

REPORT TO SUPERVISING PARTNER1
Table of Contents
Part A...........................................................................................................................................2
Part B............................................................................................................................................4
Part C............................................................................................................................................6

REPORT TO SUPERVISING PARTNER2
Part A
Third party liability is an important aspect in deciding whether to form a company or a
partnership to enter into the business. As per section 5 of the Partnership Act (1958)1 of
Australia, every person who is a partner in a firm is known as the agent of the firm and any act
carried out by the partner is considered the act of the firm. This means that his actions bind all
the partners of the firm and the firm is liable to third parties for the consequences arriving from
such acts. However, if the partnership is able to prove that the particular partner had no authority
to act in the manner that he did, then the firm ceases to have any liability on such acts of the
partner. This section also states that if the third party is not aware that the person he was dealing
with is a partner in the firm or if he is aware that the partner had no authority to enter into an
agreement with him, then the partnership cannot be held liable for such agreements. This binding
of partners is applicable in case of all states except for New South Wales. By virtue of the
Partnership (Limited Partnership) Amendment Act 19912, some partners are allowed limited
liability over the others. In case of a limited partner, the amount of liability will not exceed the
amount as shown in the register of the partnership. In case of any contribution made by them
towards the debts and contributions of the partnership, the liability of the limited partner is
reduced to the part of the amount that is unpaid as per his liability in the register. In case of a
deceased partner, his estate is severally liable for the debts contracted before his death. However,
the estate can be used to make payments related to other agreements first and not the partnership
related agreements. In Australia, companies limited by shares are the most common forms of
companies. Their structure and liabilities are similar to that of limited liability partnerships. In
case of these companies, the liability of the members is limited to the unpaid amount on the
1 Http://Classic.Austlii.Edu.Au/Au/Legis/Vic/Consol_Act/P84a1958135/ (Webpage, 2019)
<http://classic.austlii.edu.au/au/legis/vic/consol_act/p84a1958135/>.
2 Lib.Oup.Com.Au (Webpage, 2019) <http://lib.oup.com.au/he/samples/adams_BOLG_sample.pdf>.