business law Maria and Johnny are partners of the Lame Duck Restaurant. They have five employees...

business law

Maria and Johnny are partners of the Lame Duck Restaurant. They have five employees working for the business. The business is doing well and has been profitable for them. An opportunity has arisen to expand the business into Palmerston and Darwin City. Maria and Johnny are keen are keen to expand their business, but they will need a significant amount of funds to lease and fit out two more premises and employ approximately 10 more staff, as well as a manager for at least one of the other shops. Johnny is concerned about his potential liability for the debts and liabilities of the partnership. Also, he is concerned about the future of the business if one of them should decide to leave, as the current lease and future leases will be in both of their names.

Based on the above facts, advise johnny on the advantage and disadvantage of forming a company rather than retaining the partnership.( Please use issue, analyse(law) , application and conclusion to answer the question. )

Expert Solution

Business law also known as commercial law. it deals with all of the laws that prescribe creation and operation of a business includes all of the laws that deals with quest - how to start a business?, manage it ? . Laws established as a code of conduct that all businesses should follow. A shrewd business person may have awarness on business laws and know when to seek the advice of a legal adviser.

bussiness law classified on the following basis:

managing commercial entities
synchronize the commercial transactions.

Major laws switching a bussiness are :- Employment law, patent laws, law of consumer goods, antitrust and immigration laws etc. Formation of a bussiness deals with the advise of legal practitioner he will help to register a firms , give an awareness about the business rules.

Formation of company on the basis of partnership

common partnership and limited partnership are two forms of partnerships. sharing of profits and losses with a joint ownership in the business provide an equal control in the management of the business is featured by common partnership.

In the case of a limited partnership there is only one general partner with one or more limited partners. If the general partner assumes the responsibility for the management of the firm and the limited partner contributes only for assets to the business and no role in the company’s management.

Advantages and Disadvantages

pro	cons
Formation is easy	Joint and several liability
Tax relaxation to the business	individual liablility
Easy capital formation	consent of the partner needed for all activities
Improved management	danger of dissolution leads for winding up situation

Legal advisor is essential for the partnership firms to curb the Lawsuits issues, plays as a middleman to resolve the partnership issues.

Rahul Sunny answered 1 year ago

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