1. How are partnerships created?

How are they defined under the Partnership Act & what's max size of a commercial partnership? - written contract - oral - implied - conduct (by estoppel) - registration with ASIC - definition under PA: a relation between persons a carrying on of a business in common with a view of profit Carrying on - system, continuity, highly dependent on intention (trad case Smith v Anderson, trusts, not really carried on - although modern cases allows for one-off ventures eg Canny Gabriel) In common - agency, participation in mgt (AM marketing had an absence of mutuality, so failed "in common" test and was not considered a P) - max: 20 partners 2. Identify at least 3 diff btwn partnerships &

joint ventures - partnership property is owned collectively, cannot (subject to agreement)dispose freely like in JV where proper is owned as tenants in common. Partners cannot do what they want with property without assigning an interest first - JV's share product, P share profit - JV has limited time horizon or one-off projects, P is continuous & indefinite - JV has individual liability cf P's joint & several - JV parties are not necessarily in fiduciary relationships & do not owe each other duties 3. Explain the concept of limited liability. Limited liability means SH's assets will not be used when the company's assets are insufficient to cover debts. Saloman v saloman proved that a co's debts are not the personal debts of a controller's. 4. Compare & contrast the characteristics of a co limited by shares & a co limited by guarantee. Co ltd by shares = can be both public or private. liability ltd to unpaid share amount (if any). If shares are all paidm the SH's have no liability. Co ltd by guarantee = must be registered as a public co. liability ltd to members' contribution guarantee at wind up. Eg $50. This co cannot issue shares, thus is unsuitable for commercial trading. Usually non profit eg Oxfam

who's capital needs are modest & can be obtained from grants, donations, fundraising activities, membership fees etc. Alternate Recommendation - It's cheaper to setup as an association which also has less administration, compliancex, disclosure reqs! 5. Identify at least 4 difs btwn proprietary & public co's. a) pty > more fin'l secrecy & less regulatory burdens than public b) pty > cheaper to maintain c) public > unlimited membership d) public > greater access to financing from public 6. Under what circumstances will a pty co be classified as small & what advs are conferred on them under the CA? - at least 2 of <50 employees consolidated revenue <$25 mil consolidated gross assets <$12.5 mil (both in one year) - exempt from fin'l reporting reqs (twin benefit = privacy AND save costs) 7. How are trusts created, & what are the main purposes of discretionary trusts? Trusts are created intentionally by the settlor donating or transferring property to the trust, often a nominal amount of $ eg $50. or unintentionally

Main purposes are for - tax minimization - asset protection - reducing asset levels for income thresholds. 8. Compare the manner in which a partnership, a proprietary co & a public co can raise funds. partnership > can raise funds between partners, from savings & loans & profits. Greater pool than sole trader cos of max 20 partners. Pty > Cannot raise funds from gen public that requires disclosure under ch6D (limited membership), can raise from exempt ones, eg relatives, charity Public Co > issuing shares(equity financing) or debentures(debt financing) to investors 9. Compare the manner in which partnerships, JVs, trusts & co's are managed. Partnerships > each partner is agent & principle of the other, so they can bind others & be bound by actions of their partners, if it is within the scope of the partnership business and during the Normal course of business. Eg polkinghorne v holland & whiting JV's > managed by joint committee, usually limited to venturers' area of expertise Trusts > managed by trustee, defined by the trustee doc. Beneficiary usually has no right to interfere with the mgt. Co's > owners have no management right. Board of directors manage everything, but owners can vote them out. Managers owe FD to co. BUT owners <shareholders> can

also be directors & maintain control. 10. What are the disadvantages of running a club or society as an unincorporated association? What is the essential criteria for an association to qualify to incorporate under the association incorporation act? - Not recognized by law > thus, no perpetual succession, cannot sue, nor contract in its own name - committee is liable for debts of the association Essential criteria - register and draft a constitution - form a mgt committee - appoint a public officer - have a registered office - act in accordance with its rules - have agm - keep minutes of all it's meetings - keep a register of all it's members - lodge an annual statement - keep proper legal accounting records