Business Law Assignment: Critical Examination Of Partnership Act


Task: A veterinary pharmaceutical company has employed a group of four pharmacology scientists for many years. Occasionally they get together and attend local football matches. At a recent game they were chatting about branching out and setting up their own company. They each have financial assets and skills that they would like to bring to the business. Let’s assume they consult you on Monday morning following the game.

What business structure would you recommend? What would be the advantages and disadvantages of each business structure in this context? 

The four of them envisage that by the end of its first financial year their business would have gross assets of at least $10m, employ 40 people full time and have a gross revenue of $20 million.

If this were the case by the end of the year, how would you classify their business?

One of the scientists rings you and leaves a message. In the message she states ‘can you explain to me what a legal person is?’ What will you tell her? 

If you recommended that the scientists create a company what would be the steps that they would need to take 

Question 2
Kyle and Jackie are hairdressers. They met during the TAFE Hairdressing course and as both lived in the inner southern suburbs of Adelaide they decided to work together. They had little money of their own and so they invited one of their customers, Lynn, a medical practitioner to join their business. Lynn provided $100,000 to the business. At the end of each week they divide up the ‘profit’ three ways.

When they first were in business they used their residential flat as the place to perform their hairdressing but as numbers of customers grew they went searching for a suitable shop. Kyle found an ideal commercial space on King William Road at Hyde Park and entered a lease. He signed the lease in his name.

About 4 months after they moved into the new premises Jackie applied some hair dye to Betty, one of their customers and Betty suffers serious burns to her scalp as a result of Jackie’s careless actions. Betty is treated at the hospital and is now having 6 monthly visits to a dermatologist and expects that these will continue for the next 5 years. Each of these visits are charged to Betty at $400 per visit.

Kyle is the lead singer in a 80s revival band and given that the band members try to re-create the style of the 80s Kyle uses the premises each Saturday afternoon to attend to all the other band members, blow-drying, cutting and colouring their hair. For this work, he is paid separately by each band member and does not disclose this to Jackie or Lynn. 

Answer ALL of the following questions:
Please let Kyle, Jackie, and Lynn know 1. if they are in a partnership, and if so, who the partners are in the partnership. You can support your answer with the Partnership Act and relevant case law.

2. Who is accountable for making lease payments if they are three months late for the hair salon premises? Provide evidence from the Partnership Act and relevant case law.

3. Use the Partnership Act and case law to back up your claim that Kyle is in breach of his partnership obligations since he performs his Saturday afternoon band haircut.

4. How can Betty find out who is behind this company if she wants to file a lawsuit against it to recoup the costs of her doctor appointments and hospital bills? Cite any legislation or case law to back up your response.