General Partnerships: Legal Requirements, Liability, and Fiduciary Duties

Legal Requirements for Creating a General Partnership

In setting up a business there are various business structures, one is a general partnership.
In creating a general partnership, although not a legal requirement, it is always best for the partners to have a written partnership agreement. In the absence of such an agreement, apartnership in Ontario will be governed totally by the Partnerships Act R.S.O .1990 cP.5
a. Find section 35 (d) (e) and (f) of the Partnerships Act, R.S.O. 1990 cP.5 and name the 3 grounds referred to, that allow the court to dissolve a partnership. (DO NOT cut and paste your answer).
b. Davina, Mary, Jose and Jackson are in a general partnership together carrying on business as a group of chartered accountants. Davina wants to retire, there is no partnership agreement. Explain to Davina 3 things she should do to ensure that she is no longer liable for any future debts that the partnership might incur.
c. As Davina is about to retire, the remaining partners are considering their options. One option is to admit new partners. Explain the position if the remaining partners want to admit 2 new partners (Sally and Ashner) but Mary does not approve of having Ashner as a new partner.
d. Explain (not just name) 3 advantages of operating your business as a general partnershipas compared to a sole proprietor

Question 2.
a. Davina has now retired .The remaining partners are now considering whether it would be advisable to dissolve the general partnership and form a Limited Liability Partnership as they think that this would mean that they would avoid the unlimited aspect of a general partnership. Explain if theirs is the correct understanding with regards to the liability aspect of a Limited Liability Partnership.
b. If they decide to form a Limited Liability Partnership, describe 3 requirements that they must consider in order to form a Limited Liability Partnership.

Question 3.
One difficulty that can arise in the employment area is defining the status of a worker.
a.The CRA form RC4110 gives several factors used in deciding the workers employment status in Ontario. With reference to that form, in your own words name AND explain 4 of these factors
b. Explain 1 reason (not including vicarious liability or tax reasons) why it is important to know the employment status of a worker.
c. Comment on the accuracy of this statement that an employer is responsible for all torts committed by his or her employee.
d. From the following scenario explain if Sumir and Fahran have been hired as employees or as independent contractors and give 3 reasons for your answer.Sumir and Fahran are interior designers and have been hired by an Indian restaurant. It has been made clear to them that they should redesign the restaurant and finish the renovations by a set date. A price has been agreed. They have been told what color of paint to use but Sumir and Fahran are to provide the paint and other materials necessary to complete the renovations. Sumir and Fahran work on a casual bases, they have no set hours of work, they can arrange for another person to substitute for them, they are under no obligation to only work for that restaurant and they are responsible for their own tax deductions.

Question 4.
The law imposes fiduciary duties on an agent.
a. Explain what fiduciary duty means. For each of the following, identity if the agent could be in breach of his her duties-(note you only need to identify, not give an explanation)
b. If a real estate, Margo agent buys property from a 3rd party and then sells the property to her principal at a higher price, will a breach have occurred? c. If an agent, Thomasz decides to disclose only the information, which he thinks to be relevant to his principal, will a breach have occurred?