Contract and Trade

| The partners are jointly and severally liable for business debts and obligations. The partners are held personally responsible for the business and may be sued personally for liability. Partners’ personal assets are subject to lawsuit(s) made against the business. Lack of continuity; death of a partner may end the partnership/business if a buy/sell agreement is not in place. Disagreements may be difficult to resolve.

• CONTROL – Limited partners are not allowed to make any decisions concerning the operation of the business in which they have invested in.

Due to its nature, partnership is generally liable for the acts of the individual partners if committed in the course of the partnership business. However, liabilities of every partner may be regulated by the written agreement signed by partners. If no written agreement is signed by partners, liabilities of the partnership are regulated by the Partnership Act. If one of the partners retires, he or she may not be liable for the future debts of partnership if an official notice of the change is sent to creditors and the public. However, there were no official notice sent by the partners in the case; therefore, Toby may be liable for the debts of partnership. Due to the death of the third partner, partnership may be dissolved. In order to pay off the debts, assets should be sold and partners are free to continue the same kind of business after the dissolution of the

Liability All liabilities are the responsibility of each partner. In the event of litigation, any creditors can go after the personal assets of each partner to recover any debt owed. But since liability is spread out between the owners, one may feel less risk is being taken. 2. Income Taxes General partnership may also benefit from pass-through taxation, meaning the partners are taxed like sole proprietors. Business income is reported on the personal tax filing while business losses can be deducted to reduce personal tax liability. The partnership itself is not subject to federal income tax. However the partnership needs to file an information return utilizing the IRS Form 1065. 3. Longevity or continuity of the organization Once the partnership agreement is fulfilled, the general partnership may dissolve. A buy/sell agreement may be included in the articles of the partnership to allow the

Even if the term of the Partnership has not expired, the Partnership may terminate by: (a) Unanimous agreement of the Partners; or (b) If Can Do becomes significantly incapacited; or (c) Election of a Partner when another Partner has breached this agreement.

| Any new domestic eligible entity with a single member is disregarded as an entity separate from its owner.

a partners that might end or dissolve partnership. One of the main drawbacks of a

* Terms relating to the amount of damages that the parties might receive if things go wrong.

M Young Legal Associates Ltd v Zahid (2006): ‘The receipt by way of annuity or otherwise of a portion of the profits of a Business in consideration of the sale by that person of the goodwill of such business’

Negotiations are something that everyone experiences and does at some level. Even if informal, people negotiate and barter using what they have to offer to get what they want all of the time. However, there are times in life where the negotiations are much more serious and the stakes a lot higher. Whether official or unofficial, there are negotiation tactics and conditions that should be watched out for because they are a sign of potential problems.

Arnold J. Goldman, a. W. (2011). Business Law: Principles and Practices, 8th Edition. Mason: South-Western Cengage Learning.

In contrast, if a partner decides to leave the business, the owners will no longer be classified as partnerships and the business will end. When you are set as partnership, the decisions of every shareholder will have to be honoured and if they do not have enough experience, the business could be having troubles. An example of a partnership can be H&M, M&S...

“Morality cannot be legislated, but behavior can be regulated. Judicial decrees may not change the heart, but they can restrain the heartless” (Martin Luther King, Jr., Strength to Love, 1963). These words of Martin Luther King, Jr. speaks volume to the society that we find ourselves. It is very rare to come across business owners like Frank who wants to do what is right; first of all, by God and secondly by the laws of the country. According to Henry Cheeseman, a limited liability company is an “unincorporated business entity that combines the most favorable attributes of general partnerships, limited partnership, and corporations” (Business Law: Legal Environment Online Commerce, Business Ethics, and International Issue). The overall advantages of a limited liability company include personal liability protection, business liability protection, no ownership restrictions, flexible tax statues, no separate tax returns, no double taxation and flexible profit distribution.

A Partnership is a business form that consists of two or more individuals. There are two types of partnerships; general and limited. General partners are liable for the full extent of debts and obligations within the business. Limited partnerships provide individuals with a limitation of responsibilities in the organization’s liability; this type of partnership is dependent upon the investment percentage. Advantages of partnerships consist of cost efficiency, shared financial responsibility, complementary skill association, and offer employees partnership incentives. Disadvantages of partnerships are joint and individual liability, disagreements between partners, and shared profits (“U.S. Small Business Administration,” 2013).

Rule: In order for both partners to have an equal opportunity to take the benefit of business chances, the parners of a partnership must inform the opportunities that arise and owe a duty of loyalty to each other.