CORPORATE LAW

Corporate Law

Corporate Law

Answer 1)

Case Background

This case of Melanie and Carol is related to the profit and loss sharing no matter whether one partner is insolvent or not. These two partners have recently opened a business of Salon. The responsibility of Melanie and Carol was distributed, one was responsible of performing the beauty treatments whereas, Carol is solely responsible for providing and packaging the beauty products for sale. Furthermore, to Polly lend them $10,000 to start their business. Hence, the profit will be share among Melanie and Carol. Their client Claire purchased a beauty lotion from the business recently which cause her severe facial burn due which she has to bear other expenses as well along with pain. It was found that Carol while prepare these lotion allowed a quantity of corrosive industrial cleanser to be mixed into the lotion. Carol has no money and Claire wants to claim against Melanie and Polly. Melanie and Polly claim that the negligence and breach of contract is solely the responsibility of Carol.

Breach of Contract

According to the law in partnership, whether the company earn profit or suffers loss will be distributed equally among partners, mentioned in the partnership agreement. Moreover, if any one of the partner is insolvent or has no many, the person who is sharing the business will paid that amount. The person has only given money to start the business and has no interest in the business would not be liable for any further loss or profit the business is making (Stephen M., 2004, pp. 140).

Partnership agreement (Partnership Agreement, Deed of Partnership)

Partnership agreement (Partnership Agreement, Deed of Partnership) is a contract between the partners, who want to lead the joint venture. Partners are legally obliged to comply with the principles contained in the partnership agreement. There is no obligation to draw up a joint venture agreement to establish a civil partnership for life. Nevertheless, the partnership agreement is the best way to determine how the company will operate and who, for which he will answer. The agreement also allows the company to avoid possible misunderstandings and conflicts between partners (Inside the Minds, 2010, pp. 89).

Partnership agreements are made between two potential partners. It is not always beneficial, since the law on civil companies in 1890, by its nature, does not apply to many of the problems of today's business practice.

Typically, the partnership agreement (Partnership Agreement, Deed of Partnership) provides the following information and provisions:

Basic details of the partnership as its trade name, data partners, address and type of business.

The amount of capital invested by each partner.

The principle of profit-sharing partners, as well as other financial issues, including, for example, salary paid to partners.

Policy management and operation of a partnership, or what are the responsibilities of each partner, and who and what decisions are made.

How to manage change and modification in a partnership, including for example, how you can accept a new partner or, what happens when one partner leaves the company or ...