Case Study : Albert And Baker

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1. Albert and Baker have considered the merits of forming the company as a general partnership, thus a co-ownership of a business for profit. Under the Uniform Partnership Act, hence a model act that codifies partnership law, Albert and Baker’s respective rights to any profits of the company would be an equal share. According to Cheeseman, “Partnership agreements often provide that profits and losses are to be allocated in proportion to the partners’ capital contributions. The right to share in the profits of the partnership is considered to be the right to share in the earnings from the investment of capital” (2007, p. 298). For instance, let’s assume that Albert contributes $50,000 capital, and Baker contributes $75,000 capital and the…show more content…
If successful, the plaintiff can recover the entire amount of the judgment from any or all of the defendant-partners” (Cheeseman, 2007, p. 299). Likewise, this apply even if one of the partners didn’t partake in the act being charged. Furthermore, Albert and Baker are jointly liable for the contracts and debts of the partnership, assuming the plaintiff must name all partners as defendants in the lawsuit. If the plaintiff were to recover judgment, a partner can seek indemnification from the partnership. Therefore, assuming that Albert and Baker were to form a general partnership, they would each be held responsible for any liabilities owed by the new company, even if one of the partners didn’t partake in the act. 3. Albert and Baker have considered forming a corporation for their new business, thus a fictitious legal entity that is created according to statutory requirements. In order for Albert and Baker to form a corporation, they need to comply with the states corporation codes, thus state laws that control the formation, operation, and dissolution of corporations. First, Albert and Baker need to select only one state for incorporation a corporation. Once they select their location, they will need to provide articles of incorporation to be drafted, filed and approved by the state before they could become officially incorporated. These governing documents include, “`1. The name of the corporation. 2. The number of shares the

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