In 1977, Steeby and Fial formed a partnership to perform auditing services. They shared equally in the equity, income and profits of the partnership. They began the partnership as the only one performing the services but eventually had to hire independent contractors to do the work. In 1984, Steeby and Fial were supervising and finding new work but not performing the services. Fial’s activities generated 80% of the business and Steeby the other 20%. Fial was unhappy with the arrangement and wrote Steeby to dissolve the partnership. He said that the dissolution should simply require assignment of accounts. Fial told the ICs that their obligations to the partnership would be terminated on 9/10/84 and Fial then terminated the contacts with the clients and put them under Ks with his new firm. He then hired new auditors to do the auditing. The partnership was formally terminated on 5/23/85. Steeby sued for breach of the partnership agreement and for final accounting of the assets. Trial court found that Fial had breached the agreement by breaching his fiduciary obligations. The breach occurred when: 1) he fired the auditors and dissipated the assets of the partnership; 2) terminated the contracts with the clients and taking over the work. JUDGMENT: Upheld trial court’s determination of breach of fiduciary duty and the constructive trust.

A sole trader works alone, he/she is liable for everything about the business, day-today running of the business, its success and failure. If he/she fails, he/she will lose not only his/her business but his/her losses will extend to his/her personal possessions too to cover the cost of the business.The capital investment is comparatively less,The managerial ability of a sole trading concern is limited.

In partnerships, the business is organised by partners and owned equally amongsts them. The decisions are made by the