Question One
Introduction
Nowadays, trading between people and country become easier and easier. With the boom of economic, a consideration of starting a new business is very important. Common business structures including Sole Trader, Partnership, Joint Venture, and Corporations. Among those structures, partnership and corporations are the most popular structures for creating a business. This essay will discuss all of them point by point.
Cost-Effective
When we say that partnership is easy to establish, the first thing comes out is that partnership doesn 't need to be registered. Which means partners don 't need to fill paper works, or spend money on legal formalities. There is one exception, if the partnership use a business name, then
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Re Ruddock (1879) indicate that “ to determine the real nature of the business relationship the court will look at the agreement itself, the parties itself, the whole course of the dealings between the parties”. Compare with Re Megeband case, both of cases are sharing the profits equally. But the difference is that in Re Megeband case, there was a loss sharing agreement while in this case they did not mention of losses. It’s hard to determine that if there is a partnership between Adrian, Bob and Charlotte, Dennis. However, according to Buckingham case, if there are more characters like partnership than not a partnership, it should be a partnership. Basis the analysis on step 2, it’s more likely be a partnership between Adrian, Bob and Charlotte, Dennis.
Default Rules as to Interests and Duties as Partners:
Section 24(1)(a) indicate that “Partners share equally in capital and profits and must contribute equally to losses”, Adrian, Bob,Charlotte and Dennis agree that they would share profits equally, but they didn’t mention about the loss. Therefore, all of them four will share the losses equally. Section (1) (e) gives all parties the right to management the business. Thus, even Adrian, Bob,Charlotte and Dennis are taking charge for different section of the business, all of them are decision makers. However, any
The second challenges to start up business are the form of ownership to choose. According
Partnership – “A legal entity formed by two or more co-owners to operate a business for profit.” (Longenecker, Petty, Palich, Hoy, Pg. 202) In a partnership, the advantage for the owners is the capability to reduce the workload and the financial burden, especially if each partner has management skills that enhances the business. The disadvantages of a partnership such as personal conflicts and leadership expectations, therefore this organizational form should only be chosen once all other options have been considered.
Capital is a major factor for decision making. Since the business involves a group then the three forms of business exposes the group to a greater capital availability. The liability of members is also an important factor. The partnership offers unlimited liability to the members of the partnership while the corporation and Limited Liability Company allows the members limited liability and thus their personal assets cannot be interfered with in the event of a liability. The decision making process is for the business associations but the input of all members results to the making of good and informed decisions. Finally, the taxation practices for various forms of associations informs the decision. Corporations are often taxed twice whereas the LLC and partnership business is taxed
1.To decipher whether the Adelaide Jammers were in fact a partnership, it has to be looked at if the parties involved were ‘persons carrying on a business in common with a view of profit’ as stated in the Partnership Act . Barak Obama and Tania Plebiscik were the original members of the band and created the original contract. The pair did intend to carry on a business as the Adelaide Jammers was not stated to be a one-time performance, which was also shown with the fact that later on the original two decided to add more members to further the success of the band. As in Krizaic v. Ravinder Rohini Pty Ltd the pair had planned and intended to create and carry on this band, thus completing one element of the partnership definition . They also
The court cited the Universal Partnership Act that defined a partnership as "the association of two or more persons, for the purpose of carrying on as co-owners a business for profit.
As with any kind of business formation, there will always be, to some extent, negative aspects associated with the creation. To this date there is no perfect form of business entity. When deciding on which entity is best suited for a business, there are many things to be considered. Prior to deciding on a business structure, some major points to be thought about are both the legal and tax ramifications associated with the entity chosen. Another criteria that should be considered are the costs connected with the entity type. These cost include the cost of formation as well as any continuing administrative cost that may be incurred. (“Choose Your Business,” 2011)
Partnership is generally straightforward and need low costs to be framed it just require an understanding between the parties. All partners evolve in the administration and making the decision as they all have the right to help in any decision. As they are a number of partners that implies they have a much greater source of funds than a sole trader. On the other hand, the Disadvantages of partnership are that it doesn 't have a legitimate identity of its own. The survival issues, as the partnership will be broken up in light of the death of the partner or regardless of the fact that the partner went insolvency. Endless obligations, where the debts in partnership might be taken generally as it could be taken from their own assets to settle the
Children everywhere know popular nursery rhymes which they tend to use on the playground. One song they might sing is “Eenie, Meenie.” The song became very popular when kids needed to pick the person who would be “it” for a recess game, since it provided a fun rhyme to go along with making the random pick. Although seeming innocent, many children's songs have been changed because of their past renditions being R rated for kids to be saying. And “Eenie, Meenie” is one song that has a grueling history. This may just seem like a fun nursery rhyme; however the past behind it is much more cruel and hateful. However most children songs don’t simply vanish, but instead people will alter the wording to make it much more acceptable.
...uires the partnership to state who all the partners were at the time the cause of action arose. S28(1)(b). It provides that a partnership can be sued in any area where it has business premises or where one of the partners resides
The three main business organisation structures considered by Steve and Wonder are partnerships, trusts and companies. In order to understand the key differences between the three and to put forward a recommendation for the most apt structure, it is essential to grasp the basic definition of each .
Sole Proprietorship: This a type of organizational form “where there is no legal distinction between the business and its owner”. ( ) Are easy to start, as well as relocate. There is complete autonomy over every aspect of the business and 100% of the profit is retained by the owner and only taxed once. Although there is often a high tax rate on the profit and the capitol needed to start or grow the business can only come from the sole owner or their personal means of credit. Because the business and the owner are legally the same entity there is unlimited liability to the owner to honor all contracts. Also due to the lack of legal separation the business ceases to exist upon the death of the owner.
Partnerships, that started in 1990s (Higgins, 1998), begins with the expectation that each party would achieve far greater goals than each ever may by working individually (Kumaran et al., 2010). It was later classified as statutory, voluntary, commercial or contractual (Geddes, 2005) having components, like, joint planning, operating controls, communications, risk or reward sharing, trust, contract style and investment (Lambert, 2008). Therefore, it is mainly dependent on analysis of need, gap, opportunities, expectation, discussion, consensus, commitment, goal, rules, planning, responsibilities, motivation, negotiation, evaluation and recognition (Anandajayasekaram and Puskur, 2010). Further, there is a need to identify the “Partnership-performance parameters” (Waal et al, 2010). On the other
As they change to Corporate limited, Thurston’s could argue to claim remedies because of separate legal entity as demonstrated in the famous case of Salomon v Salomon & Co Ltd (1897). Pennington (2001) stated that terms for partnership decisions of each partner binding on the others whether knowingly or not.
As we know, there three popular forms of business are Partnership, S Corporation, C Corporation. The taxpayer want to start a business for 2014. Then there are some impact on Partnership, C Corporation and S Corporation.
Deciding how important decisions are made is crucial in any business structure, but even more so when there is more than one owner. Therefore, the partnership agreement mandates how the owners will make decisions by either unanimous vote or by majority vote. Capital contributions include funds provided by the partners to be utilized in the business. The partnership agreement dictates how much each partner will contribute to the business as well as plan for future financial obligations. Salaries and distributions are often classified as partner withdrawals and profit/loss allocation. The partnership agreement establishes when money is available for withdrawal and how much of the profits and losses are allocated based on capital contributions. All business entities should be prepared for worst-case scenarios involving death, disability, and dissolution. Deaths and disabilities are untimely, so the partnership agreement outlines who inherits the partnership’s assets through trusts and wills. Dissolution is never a pleasant topic to think about in the beginning, but it is essential nonetheless. The section inclusion in the partnership agreement enables the partners to be prepared in the event that a dissolution does occur (Neville