Law of associations partnerships

Topics: Partnership, Types of business entity, Corporation Pages: 6 (1652 words) Published: October 25, 2013
How to answer a partnership question
1. Identify the issue.
2. Does the issue rely on the relationship being a partnership? 3. • The carrying on of a business;
• In common;
• With a view to profit.

Carrying on of a business
Define business – S1B - Partnership Act 1892 (NSW) - Act: Business is every trade, occupation or profession. As well as S. 45 Legislation
- Section 1 of the Partnership Act 1892 (NSW) provides that : (1) Partnership is the relation which exists between persons carrying on a business in common with a view of profit and includes an incorporated limited partnership. If the definition in s 1 of the Partnership Act 1892 (NSW) is satisfied then the law of partnership may apply. If a partnership is not proved it may be possible to apply other principles of trust or equity to the fact scenario. Cases

Canny Gabriel Castle Advertising Pty Ltd & Anor v Volume Sales (Finance) Pty Ltd (1974) => this case suggests that the emphasis which is to be placed on the continuity of “business” is not heavy to a point of absolute decision. Our conclusion that the joint venture was a partnership, from which the parties anticipated profits and provided that the advance by Volume Sales to the ‘joint venture’ should be a first charge upon profits and that upon the repayment of such sum the profits should be divided equally, rests upon the following considerations:

1. the parties became joint venturers in a commercial enterprise with a view to profit;

2. profits were to be shared (see Partnership Act 1892 as amended (NSW) s 2(3));

3. the policy of the joint venture was a matter for joint agreement and it was provided that differences relating to the affairs of the joint venture should be settled by arbitration (see cll 7 and 9);

4. an assignment of a half interest in the contracts for the appearances of Cilla Black and Elton John was attempted, although, we would have thought, unsuccessfully;

5. the parties were concerned with the financial stability of one another in a way which is common with partners …

carrying on”- what does that mean? Smith v Anderson (1880) tells us it involves the repetition of an act. => An ordinary partnership is a partnership composed of definite individuals bound together by contract between themselves to continue combined for some joint object, either during pleasure or during a limited time, and is essentially composed of the persons originally entering into the contract with one another.  What if we do NOT have repetition? Is there carrying on of a business? No. for fairness reasons the Re Griffin Ex parte Board of Trade (1890) 1 undertaking can actually lead to a partnership United Dominions Corporation Ltd v Brian Pty Ltd and Others (1985) evolution In Common

It is not necessary, in order for a business to be carried on in common, that all of the alleged partners actively participate in the day to day management of the firm’s business. All that is necessary, in the above context, is for the firm’s business to be carried on either by or on behalf of all of the persons who are alleged to be partners. An important consideration in this respect is whether there are mutual rights and obligations between those on whose behalf the business is being conducted. Legislation

- Section 1 of the Partnership Act 1892 (NSW) provides that : (1) Partnership is the relation which exists between persons carrying on a business in common with a view of profit and includes an incorporated limited partnership. If the definition in s 1 of the Partnership Act 1892 (NSW) is satisfied then the law of partnership may apply. If a partnership is not proved it may be possible to apply other principles of trust or equity to the fact scenario. Cases

Smith v Anderson 1880 => Investment case $100 for 90$ and the share holders do not know of the other people purchasing. Hence no partnership. Lack of common interest. Lang v James Morrison & Co Ltd (1911) => The High Court upheld the appeal,...
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