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Corporate Business Law Proof Reading Services
This corporate business law assignment help an organization may form under various corporate structures as suited to the requirements of the business and the shareholders involved. The various types of organization business structures are to be studied with reference to the case study provided. Further, it is essential to derive the defenses and rights available to the organization in case of breach of contract, tort or consumer rights.
The most prevalent business structures that may be used by the three of them are that of following nature:
- Partnership: Under a partnership structure, people come together to carry out a common business and achieve such objectives the benefits of which may be derived in proportions as agreed among the partners to the business. The structure incorporates a distribution of equal loss and profit sharing margins for the smooth operations. It also reduces the costs per head as everyone contributes a certain amount of capital. The business names for partnerships may be registered through ASIC rules. To ensure the smooth functioning the partners should make sure that a contract is drafted to safeguard the interests of the partners and the organization so formed collectively Canny Gabriel Castle Advertising Pty Ltd & Anor v Volume Sales (Finance) Pty Ltd. The partners generally undertake sets of responsibilities to divide the functioning of managing the partnership. This share of responsibility in turn makes them proportionately liable for any loss or profit so occurring from the performance of certain actions. (Corones, 2011)
- To study the proportions the partnership may be discussed under two heads such as the limited or unlimited partnership. Under the limited partnership the liabilities towards the business are limited through the amount invested into the business Cox v Hickman. According to the Partnership Act, liability of such partners are determined under the Register of the company. Accordingly, the liabilities towards any partners shall not go beyond the amount so invested by him Polkinghome v Holland. It is required for a valid and legal partnership to sign for an ABN. (Cameron, Tucker and Hammer, 2011)
- Company: A company is namely regarded as a separate legal entity in order to represent the common interests of the group of people. The company is regarded as veiled under the corporation which is primarily functioned through the directors of the company. A company is usually treated as a body as that of a person. The company may have the same rights that a person might have under a business. The shareholders of the company are considered to be the owners of the company and thereby the liability is regarded to be limited to the extent of investment. Such a business structure is considered to be expensive as the investments, capitals and the administrative costs are steep to be run smoothly. The reporting mechanisms and the registration costs add to the entire running costs that makes it more expensive. Just like an individual the company may apply for loans and debts in the name of the company in turn to be repaid in future. The company functions are regulated by Corporate law Act. (Gibson and Fraser, 2007)
- Trust: An organization structure whereby the assets by one party are entrusted to another party for the purpose of safety or security is known as a trust Stickney v Keeble. The person deriving the benefits from such assets is regarded as a beneficiary Breen v Williams. If the structure is adopted then the trustee is responsible for the functioning of the company. A trust does not have to be registered under the ASIC unless it is a company Fletcher v Burns. A trustee would have legal interest within a company wherein the equitable interest is shared by the beneficiary Gardner v Rowe.
According to the case scenario provided, Jack, Jill and Ma should opt for a partnership business structure so that it can cost comparatively less than other business structures and the liabilities may be divided as required. The efforts may be put in by all the partners in order to cut down on workload and enjoy the benefits so derived equally.
- The liabilities that Child Toys Pty Ltd. May be exposed to is that of consumer liability, contractual liability and tortuous liability. According to the case study Betty was a salesperson at the company working in the best interest of the industry Balfour v Balfour. Betty while making a sale misrepresented the true nature of the goods or toys being sold by the company. The misrepresentation so made by Betty was stating that the plastic so used while manufacturing the toys is not harmful for the use of children whereas it is not true Concrete Constructions v Nelson. As a result the sales for the toys reduced when the truth about the toys was realized by the users. The same came about from the incident wherein the child had suffered injuries from the chemicals present in the toy. (Harris, 2013)
- The company would have to realize the liability towards the customers for misrepresentation of the quality of the toys under the contract legislation. The misrepresentation so undertaken is regarding the quality of goods offered to the customers which according to the legislation is to be of standard quality that may be expected by the product under such an industry. A misrepresentation that was made regarding the term that directly influenced the buying decision of the customer thereby, the term would be regarded as part of the contract and a condition. As the condition is breached by the company it is a breach of contract for which the liability would be paid back to the customer Blackpoll & Fylde Aero Club v Blackpoll Borough Council.
- The company may also be considered liable under the consumer legislation. Accordingly, the company is expected to maintain the quality of the consumer goods and that the same are provided with duty of skill and care for dealing with the same products on a regular basis Money v Westpac Banking Corporation. The consumer legislation provides certain remedies for the breach of duties by the sellers such as rejection, rescind, repayment or repair. Thereby, the company may be obligated to fulfil the claim so made by the particular customer for the provision of a sub-standard good.
- The third type of liability that the company may have to bear is concerning the liability under tort in reference with the vicarious liability for the wrong so committed during the performance of official duty Hadley v Baxendale. As Betty had misrepresented the facts of the product while making the sale to retailer customers, the same was carried out while carrying out the duty in official nature. Thereby, the breach of duty affects the customer in a grieve manner causing physical and psychological damage. The company thereby would be responsible for the damages so caused to the customer. (McQueen, 2009)
- According to the case study, the employee at the company named Charles worked for the time span of five years as Operations Manager due to which he was regularly in touch with the major clients and their identity. In the month of March he decided to leave the company. However, he had signed the contract with the company regarding the term that he would not engage himself in the business of similar nature for the next two years. However, after he left in the month of June, his wife starts to run a business of similar nature as a sole director. Charles himself becomes a part of the company by being a stakeholder. The legality of such actions is to be determined under the given scenario Maguire v Makaronis. (Harris, Hargovan and Adams, 2009)
- It may be stated that Charles had not initiated the business but his wife had did the same. It could be said that Charles was not running the business of same nature but his wife. The contract did not mention anything regarding the participation in such businesses. The customer of the previous company are approached for the benefit of Charles Wife’s business. It was applied under the case of Aussie Home Loans decision that the restraint against the enticement of ex-clients from previous employer is justified. However, such restraints are only considered valid and fair for employees that may be in direct influence of such information. Charles however was not practicing the business himself but he had access to the information that might make the business profitable.(Gibson and Fraser, 2007)
- Under common law such post-employment restraints are considered unfair. However, under such cases it is considered fair to impose such restrictions because the know-how and skill so gained is from being in such a position that was offered for the benefit of the company. In the given case it may be determined that Charles was not directly part of the company but indirectly. Accordingly he did not apply the knowledge towards his own business he merely shared with his wife under confidence. The common law husband-wife privilege will prevail and thereby, Charles will not be said to have been poaching or soliciting clients according to the employment contract. Thereby, the company may not be able to bring any claims as not breach has taken place.
It may be derived that the company is required to analyze the type of business law that is to be carried out based on the purpose and nature. The business structure shall suit the ownership arrangement and the profitability to be derived. The case scenarios provided are analyzed with respect to the legislations concerning the employment legislations, contract legislations and the tort.
- Cameron, M., Tucker, L. and Hammer, C. (2011). Employment and the law. Sydney: Legal Information Access Centre.
- Corones, S. (2011). The Australian consumer law. Rozelle, N.S.W.: Thomson Reuters (Professional) Australia.
- Gibson, A. and Fraser, D. (2007). Business law. Frenchs Forest, N.S.W.: Pearson/Prentice Hall.