LAWS20059 Term 1, 2020: Business Structure Advice Report for Partners

This assignment provides an analysis of business structures, specifically focusing on general partnerships. The report advises on the advantages of establishing a general partnership, including lower setup costs, greater control, and ease of operation. It addresses key considerations such as the need for a partnership deed, profit-sharing arrangements, and the allocation of responsibilities among partners. The assignment emphasizes the importance of a partnership deed to clarify roles, manage liabilities, and resolve disputes. It also provides advice on the process of setting up a partnership, including the registration of the business name and considerations for capital contribution and profit sharing. The assignment concludes that a general partnership is the most suitable business structure for the clients, offering them control over their business while addressing legal requirements. The report also considers the implications of partnership dissolution and the management of assets. This assignment is part of the LAWS20059 course and follows the Australian Guide to Legal Citation (AGLC).

Part B – Oral
advice to clients

Hell
o!
I am <insert name>. I
am here to present you
the reasons on why you
should start your
business as a
partnership firm. In
doing so, I would also
try to resolve all your
queries.
2

Advice: General
partnership
✔ Based on your present situation, the best form of business structure
for you is general partnership
✔ Key reasons being:
✔ Low set up and running costs
✔ More control over business
✔ Ease of starting and ending business
✔ Less regulatory compliances
✔ Just be careful about:
○ Liabilities that you owe
○ Applicable legislation
3

Setting up Partnership
✔ Two or more persons come together to run
the business with a unified goal and with a
view of sharing profits in the business.
✔ Decide on
✔ Number of partners
✔ partners contribution of capital
✔ type of partnership:
✔ General partnership
✔ Limited partnership
✔ Check business name to ensure no
trademark infringement
✔ Register business name 4

Advanatges
○ Clarity on who plays what
role and who has what
obligation
○ Particularly helpful in
resolving dispute as
courts/ partners can refer
to it for brining clarity to
matters
Partnership Deed
required?
Disadvanatges
○ Time and effort
involved
○ Assistance of lawyer
required
5

Sharing profits and
losses
✔ Partners get to share profit and losses in business.
✔ Equal sharing not obligatory.
✔ Partnership deed can specify profit sharing ratio.
✔ Liability of partners can also be retricted in
partnership deed, making it a crucial document.
✔ Profit sharing also depends on capital
contribution.
6

Winding up
✔ A partnership ends with death of partners or when
dissolution of partnership takes places. A partnership
can be dissolved based on acts of partners, illegality,
operation of law, and by the court.
✔ The assets of partnership are managed as per governing
legislation.
○ Losses are first set off from profits then from capital
○ The remaining amount is distributed among partners.
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Further deicisons
required
✔ Decide on whether on not:
○ Partnership deed will be created (we advice
to create one)
○ Profit sharing ratio
○ Capital contribution
○ Role of each partner, by segregating
responsibilities
○ Restricting expenses that each partner can 8

Conclusion
✔ General partnership is the best business structure for
partners.
✔ Greta, Mariana and Ted would have control over business
without need for a fourth person interference in daily affairs.
✔ Company would be a costly affair for you and would also
take away your control from business.
✔ There are no regulatory backlash for breach of partner
duties and matters can be resolved mutually.
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