...Partnership Act 1892 Preamble WHEREAS it is expedient to declare and amend the law of Partnership: Be it therefore enacted by the Queen's Most Excellent Majesty, by and with the advice and consent of the Legislative Council and Legislative Assembly of New South Wales in Parliament assembled, and by the authority of the same, as follows: Part 1 – Preliminary 1A Name of Act This Act may be cited as the Partnership Act 1892. 1B Interpretation (1) In this Act:"business" includes trade, occupation and profession."Court" means the court having jurisdiction in the case concerned."general partner" is defined in section 49."incorporated limited partnership" is defined in section 49."limited partner" is defined in section 49."limited partnership" is defined in section 49. (2) In this Act, a reference, in relation to an incorporated limited partnership, to the partnership or the firm is a reference to the incorporated limited partnership as a separate legal entity and not to the partners in that partnership. (3) Notes included in this Act do not form part of this Act. 1C Application of laws of partnership to incorporated limited partnerships Except as provided (whether expressly or by necessary implication) by this Act or any other enactment, the law relating to partnership does not apply to or in respect of an incorporated limited partnership, the partners in an incorporated limited partnership or to the relationship between an incorporated limited partnership and...
Words: 7355 - Pages: 30
...Chapter 15 Partnerships: termination and liquidation Answers to Questions 1. A dissolution refers to the cessation of a partnership. In many cases, this process is simply a preliminary step in the transfer of business property to a newly formed partnership. Therefore, a dissolution does not necessarily affect the operations of the business. In a liquidation, however, actual business activities must cease. Partnership property is sold with the remaining cash distributed to creditors and to any partners with positive capital balances. Dissolution refers to changes in the composition of a partnership whereas liquidation is the selling of a partnership's assets. 2. Many reasons can exist that would lead to the termination and liquidation of a partnership. The business might simply have failed to generate sufficient profits or the partners may elect to enter other lines of work. Liquidation can also be required by the death, retirement, or withdrawal of one of the partners. In such cases, liquidation is often necessary to settle the partner's interest in the business. The bankruptcy of an individual partner can also force the termination of the business as can the bankruptcy of the partnership itself. 3. During the liquidation process, monitoring the balance of the partners' capital accounts becomes of paramount importance. That amount will eventually indicate either the cash to be received by the partners as final distributions or the additional contributions...
Words: 8201 - Pages: 33
... | |DISSOLUTION AND LIQUIDATION OF A PARTNERSHIP | | | | | |Multiple Choice Questions | LO1 |1. | |Which statement is correct in describing the rank order of payments as specified by the Uniform Partnership Act? | | | | | | | | |a. |Payments to partners with loans to the partnership are ranked equally with payments to other creditors. | | | |b. |Payments to partners with loans to the partnership are ranked ahead of payments to partners without loans to the | | | | |partnership. | | | |c. |Payments to other creditors are ranked ahead of payments to partners with loans to the partnership. | | | |d. |After payments are...
Words: 3209 - Pages: 13
...Chapter 15 Partnerships: termination and liquidation Answers to Questions 1. A dissolution refers to the cessation of a partnership. In many cases, this process is simply a preliminary step in the transfer of business property to a newly formed partnership. Therefore, a dissolution does not necessarily affect the operations of the business. In a liquidation, however, actual business activities must cease. Partnership property is sold with the remaining cash distributed to creditors and to any partners with positive capital balances. Dissolution refers to changes in the composition of a partnership whereas liquidation is the selling of a partnership's assets. 2. Many reasons can exist that would lead to the termination and liquidation of a partnership. The business might simply have failed to generate sufficient profits or the partners may elect to enter other lines of work. Liquidation can also be required by the death, retirement, or withdrawal of one of the partners. In such cases, liquidation is often necessary to settle the partner's interest in the business. The bankruptcy of an individual partner can also force the termination of the business as can the bankruptcy of the partnership itself. 3. During the liquidation process, monitoring the balance of the partners' capital accounts becomes of paramount importance. That amount will eventually indicate either the cash to be received by the partners as final distributions or the additional contributions...
Words: 8969 - Pages: 36
...Bin No. Box No. *, y : R0 Z.; Partnership Act, 1890. Year. [53 & 54 VICT] [CH. 39.] ARRANGEMENT OF SECTIONS. Nature of Partnership. Section. Definition of partnership. 2. Rules for determining existence of partnership. 3. Postponement of rights of person lending or selling in consideration of share of profits in case of 1. insolvency. 4. Meaning of firm. Relations of Partners to persons dealing with them. 5. Power of partner to bind the firm. 6. Partners bound by acts on behalf of firm. 7. Partner using credit of firm for private purposes. 8. Effect of notice that firm will not be bound by acts of partner. 9. Liability of partners. 10. Liability of the firm for wrongs. 11. Misapplication of money or property received for or in custody of the firm. 12. Liability for wrongs joint and several. 13. Improper employment of trust-property for partnership purposes. 14. Persons liable by "holding out." 15. Admissions and representations of partners. 16. Notice to acting partner to be notice to the firm. 17. Liabilities of incoming and outgoing partners. 18. Revocation of continuing guaranty by change in firm. 19. 20. 21. 22. 23. Relations of Partners to one another. Variation by consent of terms of partnership. Partnership property. Property bought with partnership money. Conversion into personal estate of land held as partnership property. Procedure against partnership property for a partner's separate judgment...
Words: 6235 - Pages: 25
...BUSINESS ORGANIZATIONS INTRODUCTION This unit introduces students to the most common forms of business organizations, namely sole proprietorship, partnership and limited liability companies. However, emphasis is placed here on partnership and the legal consequences which flow from the formation of such a method. The main advantages and disadvantages of these forms of business organizations are also discussed. Important Concepts in Business Organizations The following are some important concepts in business organizations: Incorporation The law permits the creation of artificial or legal persons. An example of such is an incorporated company. This means that such an organization has a legal personality separate from its members. Legal Personality Under The English Law, all human beings have a legal personality. A legal personality is made up of a person’s legal rights and duties. However, the extent of these rights and duties is dependent on whether the person is an adult or a minor. A minor has limited rights and few duties. By operation of the law, an incorporated company has a legal personality Limited/unlimited Liability As a result of an incorporated organization having its own legal personality, its members are not generally liable for the debts of the organization. This however is in contrast to a partnership which does not have a legal personality separate from the partners. Here, partners have unlimited liability for partnership’s debts. Also, a sole proprietor...
Words: 3835 - Pages: 16
...Page 1 of 19 PARTNERSHIP It is a CONTRACT whereby two or more persons (1) bind themselves to CONTRIBUTE money, property, or industry to a COMMON FUND (2) with the intention of dividing the PROFITS among themselves or in order to EXERCISE a PROFESSION a STATUS and a FIDUCIARY RELATION subsisting between persons carrying on a business in common with a view on profit CHARACTERISTICS OF THE CONTRACT OF PARTNERSHIP [C, C, L, I, AS, NP] 1. CONSENSUAL perfected by mere consent 2. CONTRIBUTION of money, property or industry to a COMMON FUND 3. object must be a LAWFUL one 4. INTENTION of DIVIDING the PROFIT among the PARTNERS 5. “AFFECTIO SOCIETATIS” the desire to formulate an ACTIVE UNION, with people among whom there exist a mutual CONFIDENCE and TRUSTS 6. NEW PERSONALITY the object must be for profit and not merely for the common enjoyment otherwise only a co-ownership has been formed. HOWEVER, pecuniary profit need not be the only aim, it is enough that it is the principal purpose BUSINESS TRUSTS when certain persons entrust their property or money to others who will manage the same for the former RULES ON CAPACITY TO BECOME A PARTNER 1. a person capacitated to enter into contractual relations may become a partner 2. an UNEMANCIPATED MINOR CANNOT become a partner UNLESS his parent or guardian consents 3. a MARRIED WOMAN, cannot contribute conjugal funds as her contribution to the partnership UNLESS she is permitted to do so by her husband...
Words: 8779 - Pages: 36
...Definition of Partnership A partnership is an arrangement in which two or more individuals share the profits and liabilities of a business venture. Various arrangements are possible: all partners might share liabilities and profits equally, or some partners may have limited liability. Not every partner is necessarily involved in the management and day-to-day operations of the venture. In some jurisdictions, partnerships enjoy favourable tax treatment relative to corporations. http://www.investopedia.com/terms/p/partnership.asp#ixzz49Y975kkP Types of Partnership A partnership is a business owned by two or more people. In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business. The three typical classifications of for-profit partnerships are general partnerships, limited partnerships, and limited liability partnerships. 1. General Partnership: Partners divide responsibility for management and liability as well as the shares of profit or loss according to their internal agreement. Equal shares are assumed unless there is a written agreement that states differently. A general partnership involves two or more owners carrying out a business purpose. General partners share equal rights and responsibilities in connection with management of the business, and any individual partner can bind the entire group to a legal obligation. Each individual partner assumes full responsibility for all of the business's debts and obligations. ...
Words: 8398 - Pages: 34
...people to create a partnership unintentionally? A partnership also may be created when two or more parties who do not have a written agreement or even an intention to form a partnership act in such a way as to lead third parties to believe that a partnership exists. 2. How can a person overcome prima facie evidence of a partnership? By showing that the share of profits received represented wages or payments of a debt, interest on a loan, rent, or the purchase price of a business or goods. 3. Under the Uniform Partnership Act, is partnership property owned in the name of the partnership or in the names of the partners? Under the Uniform Partnership Act, any partnership property, whether real or personal, may be owned either in the names of the partners or in the name of the firm. 4. What can personal creditors of one partner do to try to collect the partners debt form the partnership? The personal creditors of one partner can ask a court to order that payments due the debtor partner from the partnership be made to the creditors. They also can force the sale of a debtor partner’s interest in the partnership. 5. How will partnership profits and losses be share if the partnership agreement does not fix the ratio? If the partnership agreement does not fix the ratio of sharing the profits and the losses, they will be shared equally, not in proportion to the contribution to the capital. 6. If no date for the dissolution of a partnership is fixed at the...
Words: 1099 - Pages: 5
...Critically assess the various legal structures available to Northern Ireland business enterprises in the 21st Century. There are various options to anyone wishing to establish a business in the Northern Ireland economy in the 21st century. This paper will discuss and assess the three legal structures; sole traders, partnerships and incorporated bodies. Thus, establishing the features, operations, advantages and disadvantages of each. A sole trader is the simplest type of business structure. Tracey defines a sole trader as “a term used to describe an individual who carries on a business or profession without partners”. An alternative term is ‘sole practitioner’. The individual is free to engage in any kind of lawful business activity. Although small, a sole trader is not necessarily any less successful than a larger business. According to the Office of National Statistics, as of 2013, sole proprietors represented 62.6%, of all UK private businesses. Martin McNaughton, from Newry, founded Glen Dimplex in 1973, manufacturing heating pumps. He now ranks at number 736 on the Forbes Rich List, employing 10,000 staff, making a billion sales each year.The main advantage of being a sole trader is having total control over the business. There are no shareholders nor business partners one can be held accountable to. The business person can therefore make any decisions they see fit. In addition to this a sole trader receives, and keeps, 100% of the profits earned by the business...
Words: 2537 - Pages: 11
...Small-Business Idea Paper University of Phoenix ACC 561 Small-Business Idea Paper There are numerous factors affecting the type of business organizations that an owner should form, so that it is most beneficial for him and the product or services provided. In this paper, the four business structures are evaluated and the association of the legal, tax and accounting implications with the different structures are also discussed. Suppose that the government has released funds to set up small businesses, I would set up a language services company. The services will include translation, transcription, interpretation, copywriting and proofreading. Most companies nowadays provide services internationally. It is, therefore, important to be able to understand each other, not only in English but also in the local language. The different forms of business organizations are evaluated first before deciding which form best suits the services provided. Sole proprietorship is the simplest business form and refers to a single person operating the business on his own. The advantages include the ease of establishment (most sole proprietorships can be started with a low initial capital), full owner control and tax advantages (Kimmel, Weygandt & Kieso, 2009). Legally, the sole proprietor is fully liable for everything in the business and if the business fails, he is fully responsible to clear all debts. In most cases, sole proprietors have favorable tax advantages because they just pay...
Words: 1147 - Pages: 5
...Subject : National Lumber Company v. Advance Development Corporation Date: Saturday, April 20, 2013 Parties Advance Development Corporation, The partnership, is the defendant in the case. National Lumber Company, The supplier, is the plaintiff in the case. Facts Pat McGowan, Val Somers, and Brent Robertson were general partners of Vermont Place, a limited partnership formed for the purpose of constructing duplexes on an undeveloped tract of land in Fort Smith, Arkansas. The general partners appointed McGowan and his company, Advance Development Corporation, to develop the project, including contracting with materials people, mechanics, and other suppliers. None of the limited partners took part in the management or control of the partnership. Eight months later, Somers and Robertson discovered that McGowan had not been paying the suppliers. They removed McGowan from the partnership and took over the project. The suppliers sued the partnership to recover the money owed them. The partnership assets were not sufficient to pay all their claims. Who is liable to the suppliers? Procedure The Chancellor held that the affairs of Advance and Vermont Place were so merged that they had become one entity. He presented the following: I. That Pat McGowan, Advance Development Corporation and Vermont Place Properties partnership so merged their affairs to the extent that they were one and the same person or entity when dealing with the lien holders in this action. II. That...
Words: 1135 - Pages: 5
...formation is concerned, the government doesn’t require anything from the proprietor in order to create and start their sole proprietorship. There are filings which do need to be completed, but they are not required by the government. The taxation of a sole proprietorship is simple and straightforward. The profits of the company are considered the personal income of the proprietor. However, the proprietor may lose out on certain benefits associated with being taxed as a business. While a sole proprietorship, in some states, can be owned by more than one person, Betty and Betsy will need to aware of their actions so that the IRS and the state do not have a reason to imply a partnership, or other business form, due to their actions of holding themselves out as anything other than independent. (Unif. Partnership Act §202(c)(3). Should this occur, Betty and Betsy could be subject to business and tax requirements they had not anticipated. The disadvantages of a sole proprietorship are unlimited liability to the owner for the business debts and obligations (no liability shield), the difficulty in raising capital and very low liquidity in ownership of the business (if you sell a percentage of the company the business is no longer a sole proprietorship. Should the company remain small, the difficulty in raising capital will not cause a problem, but should the business grow and need to obtain more capital, the business may need to incorporate to satisfy the requirements for a bank loan...
Words: 894 - Pages: 4
...Week One Student Guide This week introduces you to the fundamental principles of the legal system, the importance of our Constitution, and an analysis of the court system. The readings in this area cover the concepts that define law and the thoughts that help shape jurisprudence along with its history. The Federal Court, Supreme Court, and the jurisdiction of the courts are also covered. Constitutional law is covered from the perspective of business. This week also provides an introduction to the various forms of business. Small businesses, entrepreneurs, and general partnerships are explored. You discuss how a corporation is formed and how it can be financed. Finally, you study limited liability companies and limited partnerships, as well as franchises and special forms of business. This week further introduces you to the concept of alternative dispute resolution as a method for resolving disputes outside traditional litigation. After first looking at the litigation process, you are then introduced to arbitration, negotiation, mediation, conciliation, minitrial, fact-finding, and the use of a judicial referee. The Legal System and the Legal Forms of Business OBJECTIVE: Explain the major components of the legal system. Resources: Ch. 1, 2, & 4 of Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues Content • Ch. 1: Legal Heritage and the Information Age o Introduction to Legal Heritage and the Information...
Words: 1106 - Pages: 5
...various entity types. Limited or general partnerships, corporation, sole proprietorship, nonprofit organizations, Limited Liability Company (LLC), and Limited Liability Partnership (LLP) may be a few examples of the styles available for business shareholders and owners to choose from in order to carry out their business operations. Each and every style may have its own gains and setbacks as regards taxation, liability and government regulations and laws. In a bid to answer your question, I might have to make use of two different business examples which comprise of different operation styles and guidelines. The two businesses include a bar business and professional practice and may be detailed on the basis of basic requirements necessary for successful business formation. I would also be keen at outlining the entity choice for each of these businesses as a way of providing advantages over the other. A detailed explanation of how each of the two scenarios controls the taxation, liability and business issues would also be in order. To add on that, the regulations, laws and potential risks that may be involved in every business style may be identified. Bar business The best business entity choice for Miriam, Lou and Jose in their business operation could be forming a Limited Partnership. Jose and Lou would then perform the role of general partners hence manage the operations of the business on a daily basis. Miriam on the other hand, may act as a partner limited on a limited liability...
Words: 1897 - Pages: 8
