Inky Case Study

1. Legal Issues Involved
As per the Corporations Law, there are various possible options for Inky. However a suitable business structure needs to be suggested for him based on his concerns. The major concerns of Inky are that the he should suffer personal liability in case the business does not perform well so that his assets are properly safeguarded which he has built over the years from the hard earned money. Additionally he wants that his various immediate family members be the shareholders in the company. Besides this he is fascinated with the idea of using a seal on behalf of the company and also he intends to use “Inky Tat 2” for the company name.
Legal Issues and Application
The various alternatives for the company are as follows.
Sole Trader
One of the simplest business structures is the sole proprietorship model which is highly popular for small unorganized businesses in Australia. However one of the major drawbacks of the sole trader mode is that the business liabilities become personal liabilities and hence personal assets may need to be liquidated for settling liabilities arising from the business. Additionally a sole trader can conduct the business in any particular name other than his/her own name although after the introduction of registration system for notional business names , the existing laws have been altered .
Partnerships
A partnership is a legal structure where the business is run for profit by two or more individuals who constitute the partners. Normally a partnership is assisted with a partnership agreement which clearly demarcates the roles and responsibilities of the partners and additionally dictates the division of profits. Since the partnership does not have a legal identity therefore the partners ...

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...) with Kleen Limited to the tune of $9,200 and affixed the stamp of the company and signed the document. However it is not given whether as per the company’s constitution Linky is authorised to enter into this contract or not. But as discussed in the above law, in case Kleen Limited is entering into this contract in good faith, it can very well assume that Linky is the authorised person to act on behalf of the company and hence in case of any adversities that may be discovered in this regard, the contract would still stand and the company would be obliged to execute the contract.
Conclusion
Hence it can be concluded that Kleen Ltd is entitled to assume that Linky is the authorised personnel representing the company and he is authorised to enter the given contract and also that no internal rule of the company would be violated in case Kleen enters the given contract.