Discuss the Legal Liability of all three Partners of Partnership Business that is Ben, Ann and Mary in the Context of the loan taken from Shady Deals, the New Printing Press, and the Contract with XYZ Ltd.
In this we have to discuss the legal liability of all three partners of partnership business that is Ben, Ann and Mary in the context of the loan taken from Shady Deals, the new printing press, and the contract with XYZ Ltd.
Partnership Act 1890 regulates the partnership provisions in UK.
Provision 5 of Partnership Act 1890 states how partners can bind the firm and other partners from their actions. As per this Section every partner acts as an agent for both for firm as well for his other partners for regulating the business carried on by partnership. Any act done by partner related to business of the firm has power to bind the firm and partners of the firm.
There are some exceptions to this general rule which state that an act done by partner does not bind the firm and other partners if authority is not given to the partner to act on behalf of the firm for some specific case, and third person with whom such partner is dealing knows that partner has no authority, or that third person does not believe him to be a partner (Partnership Act, 1890).
Provision 6 of Partnership Act 1890 states that all partners of the firm are bound by the acts which are done to carry on the business of the firm. As per this provision any act or instrument which directly relates with the business carried on by the partnership and done or executed in the name of the firm or if any intention is showed by that action or instrument to bind the firm by any other person who is authorized and no matter whether he is partner of the firm or not, it is binding on all the partners of the firm as well as firm. It must be noted that this section does not affect any general rule of law which relates with the execution of deeds or any negotiable instrument (Partnership Act, 1890).
Provision 9 of Partnership Act 1890 states the liability of the partners. As per this provision every partner of the firm is jointly liable for all debts and obligations with other partners of the firm, and in case of Scotland partner is also severally liable for all debts and obligations of the firm which was incurred at that time when individual is partner of the firm.
In case of death of the partner his estates are also severally liable for those debts and obligations incurred at the time when he is the partner of the firm so far as they remain unsatisfied. In case of England or Ireland, to the prior payment of partner separate debts (Partnership Act, 1890).
Provision 17 of Partnership Act 1890, states the liabilities of incoming and outgoing partners of the firm. As per this provision any person who admits as a partner in an existing firm does not become liable towards the creditors of the firm for any ac which was done before he became a partner of the firm.
Any partner of the firm who retires from a firm does not hereby cease to be liable from the debts and obligations of the firm which are incurred before his retirement. Any retiring partner may be discharged from any existing liabilities or obligations by an agreement by himself or members of the firm or creditors, and this agreement can be treated as new constitution between the members of the firm and creditors.
We can understand this with the help of the case law HURST V BRYK AND OTHERS: HL 30 MAR 2000. In this case, Hob house L.J. pointed out  Ch. 1, 26B stated that liability of Mr. Hurst for the purpose of rent is indirect, and like any other liability of the firm this liability is also the joint liability of the partners of the firm and every partner is liable to pay it. Court consider the Section 9 of the partnership Act 1890 in which partners are jointly liable for the debts of the firm and not severally. For the purpose of liability debt must be incurred when they are partners of the firm (UK parliament, n.d.).
In the present case, from 1st January 2016 Ben and Ann enter into partnership as printers, and as per the partnership agreement executed between the two, any loan taken for the purpose of carrying on the business of the firm or on the name of the firm must be agreed by both partners. On 1 February 2016, Ann has taken a loan from Shady Deals for amount £100,000 for the purpose of partnership at 50% rate of interest. She pays deposit to buy new printing press from this money without informing Ben.
In this case, Ben and Ann both are liable towards Shady Deals for the amount of £100,000 because as per section 6 of the Act states partners are bound by the acts which are done on behalf of the firm and section 9 of the Act defines that every partner of the firm is jointly liable for all debts and obligations with other partners of the firm.
In this case Ben gives notice on 1st May 2016 to Ann and Mary, and as per Section 17 any partner of the firm who retires from a firm does not hereby cease to be liable from the debts and obligations of the firm which are incurred before his retirement. Therefore Ben is liable towards the Shady deals.
Section 17 of the Act also states that any person who admits as a partner in an existing firm does not become liable towards the creditors of the firm for any ac which was done before he became a partner of the firm, and in this case Mary joined the firm on 1st March 2016. Therefore Mary is not liable towards the shady Deals because this loan is taken before the admission of Mary as a partner in the firm.
In the present case, Ann purchase printing press on Credit without informing Ben and Section 5 states that Acts done by every partner for the purpose of carrying on the business of the firm has power to bind the firm and partners of the firm. There are some exceptions to this rule which state that an act done by partner does not bind the firm and partners of the firm if partner has no authority to act on behalf of the firm, and in this case Ann has no authority to done any act on behalf of the firm. In this case Ann act without the authority therefore her act does not bind the other partners of the firm as well as firm. Ben and Mary are not liable for new printing press.
In this case, Ben cannot deny his liability towards XYZ as per section 17 which states that any partner of the firm who retires from a firm does not hereby cease to be liable from the debts and obligations of the firm which are incurred before his retirement. Therefore Ben is liable towards the XYZ Ltd. Ben gives notice on 1st May 2016 to Ann and Mary therefore he is liable on for the amount which was due from 1st February 2016 to 30th April 2016. Ann is liable for complete amount and Mary is liable for the debt which was incurred between 1st March 2016 to till date and not for any amount which was due before 1st March 2016.
In UK, private Limited Company is that company which is limited by shares, and this company cannot trade their shares in general public. This company is also known as Limited Company, and this company is most common type of company which is incorporated in UK (UK companies limited, n.d.).
Section 3 of the companies Act 2006 defines that any Company is a limited company if constitution of the company limit the member’s liability. Company can be of two types either limited by shares or guarantee and in case of Private Limited Company is limited by shares.
Company limited by shares means when member’s liability is limited to that much amount which is not paid by the members on the shares held by them. In case, if liability of the member’s is not limited then company is fall under the category of unlimited company (Companies Act, 2006).
Section 4 of the Companies Act 2006, states that a Private Company is any Company which is not a public company (Companies Act, 2006).
Section 59 of the Companies Act 2006 states, that any company which is Private Limited must use “limited” or “ltd.” in the end of their company name, and in case of Welsh Company its name may be end with “cyfyngedig” or “cyf” (Companies Act, 2006).
There are some specific companies which are exempt from this requirement, and these companies are stated in Section 60 of the Act (Companies Act, 2006).
Private limited Company is a more complex business structure as compared to sole trader and partnership. Any company which is limited by shares is mostly known as Private Limited Company. Company limited by shares states that liability of members is limited up to their capital investment. Members cannot offer shares of private limited companies to general public and these shares cannot be traded on stock exchange. Following are some characteristics of private limited company:
Following are the advantages of Private Limited Company in UK are:
At last we can say that this form of company has very special status in the eyes of law because these companies have their own legal entity and they have right to sue other or they can have assets on their own name. The ownership of this company is divided into parts which are known as shares and person who holds these shares is known as shareholders of the company. These companies have their own legal entity therefore their owners are not liable personally for the debts of the company. Shareholders have limited liability and this is the biggest advantage of this company (BBC, n.d.; OCRA, n.d.).
In the present case, Ben can opt for the Private Limited Company because in this liability of the members are limited up to the amount their capital invested.
Companies Act 2006- sect 3.
Companies Act 2006- sect 4.
Companies Act 2006- sect 59.
Companies Act 2006- sect 60.
Hurst V Bryk and Others: Hl 30 Mar 2000.
Jordans. Private Limited Company. Available at: https://www.jordans.co.uk/company-formations/private-limited-company. Accessed on 23rd February 2016.
Ocra. Corporate Information. Available at: https://www.ocra.com/jurisdictions/ukcompanies.asp. Accessed on 23rd February 2016.
Partnership Act 1890- sect 17.
Partnership Act 1890- sect 5.
Partnership Act 1890- sect 6.
Partnership Act 1890- sect 9.
UK Limited Companies. Limited Liability Companies. Available at: https://www.ltdcompany.co.uk/company-formation/limited-liability-company/. Accessed on 23rd February 2016.
UK Limited Companies. UK Private Limited Company. Available at: https://www.ltdcompany.co.uk/company-formation/private-limited-company/. Accessed on 23rd February 2016.
WWW. Parliament. UK. Judgments - Hurst v. Bryk and Others. Available at: https://www.publications.parliament.uk/pa/ld199900/ldjudgmt/jd000330/hurst-2.htm. Accessed on 23rd February 2016.
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2018). Legal Liability In Partnership:. Retrieved from https://myassignmenthelp.com/free-samples/legal-liability-in-partnership.
"Legal Liability In Partnership:." My Assignment Help, 2018, https://myassignmenthelp.com/free-samples/legal-liability-in-partnership.
My Assignment Help (2018) Legal Liability In Partnership: [Online]. Available from: https://myassignmenthelp.com/free-samples/legal-liability-in-partnership
[Accessed 30 March 2020].
My Assignment Help. 'Legal Liability In Partnership:' (My Assignment Help, 2018) <https://myassignmenthelp.com/free-samples/legal-liability-in-partnership> accessed 30 March 2020.
My Assignment Help. Legal Liability In Partnership: [Internet]. My Assignment Help. 2018 [cited 30 March 2020]. Available from: https://myassignmenthelp.com/free-samples/legal-liability-in-partnership.
We have brought a unique essay typer that can help you get tool that can help you get urgent essay help in minutes. Now essays with tight deadlines would not be a problem. Our essay typer tool resources information from millions of pages and provides you help with essays on practically any essay topic, or any subjects. Even the referencing is done aptly. You just need to enter the topic in the text box of our essay typer and get an instant essays just by randmly pressing any button on the keyboard. Use the tool now.
Answer: Activity 1 The fundamental ingredients of an insurance contract include the following: the offer and acceptance between the assured and the insurer, presence of an insurable interest, utmost good faith, the immediate and the proximate causes are under the insurance contract. Furthermore, the methods of subrogation, indemnity and contribution are under the elementary principle of an insurance. It also includes the key idea of having ...Read More
Answer: Introduction Internal competition, decentralization and several elements increase the risk of the company; risk exposure calculator calculates the risk of the company by considering the pressure points related with the performance, information management and growth of the company (Forouzanfar & et al. 2015). The present study is related with the analysis of risk of the company named as Property Millionaire. The company...Read More
Answer: Report To Chairperson Board of Directors From: Jane White, Corporate Governance Consultant Date: 22 January 2019 Subject: Cybersecurity policy of the company In the world full of technology, every organization is diverting it is focused on the use of technology. The reason behind the same is the infinite advantages that technology adds to the overall value of the company. The use of the internet and other technological innovatio...Read More
Answer: Introduction A teenage girl, Abigail Sataur from Ontario has sued Starbucks claiming that the company and its employees have failed to take reasonable care to ensure her safety. It has also been held by the plaintiff that the company has failed to take measures to prevent the injury, which was foreseeable. The plaintiff claimed general and special damages of $1 million from the defendant (Adriano, 2019). In such case, the court in ge...Read More
Answer: Introduction The code of conduct refers to the set of the rules defining the social standards, spiritual rules and liabilities of, and or suitable exercises for the people. The code of conduct which is written for the company’s employees, secures the business and provides the notification to the workers in respect of expectation of the employees. In the following parts, the code of conduct of Wesfarmers limited is discussed. Wes...Read More
Just share your requirements and get customized solutions on time.
Our writers make sure that all orders are submitted, prior to the deadline.
Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.
Feel free to contact our assignment writing services any time via phone, email or live chat.
Our writers can provide you professional writing assistance on any subject at any level.
Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.
Get all your documents checked for plagiarism or duplicacy with us.
Get different kinds of essays typed in minutes with clicks.
Calculate your semester grades and cumulative GPa with our GPA Calculator.
Balance any chemical equation in minutes just by entering the formula.
Calculate the number of words and number of pages of all your academic documents.
Our Mission Client Satisfaction
thank you guys i have not got grade but look vey good. you always doing good job. thank you again and again
Amazing work done by the expert. Would love to give more work to this team. Attention to detail
It was awesome and got desire score..I am very happy to work with them and I will work with them.
I\'m okay with the work. Took time to answer my concerns and feedbacks. Delivered within the required timeframe