Partnership Dissolved Automatically

Question: Discuss about the Partnership Dissolved Automatically. Answer: Introduction: A partnership can be formed when two or more people are involved. These can be either general or limited. There should be valid agreement that has to be formed between the parties. There is a mutuality of the rights. An agency is established in a partnership. Various interests and obligations are held by the partners towards each other. A business is to be carried on which is to be opposed to an isolated transaction. In a partnership, there should be a joint ownership. The partners have to share with each other the gross returns. This sharing would be done according to their share in the business. A partnership can be dissolved by various ways. It can be through the action of the partners. The partners death can be one way. If the purpose of the partnership is not legal then also the partnership can be dissolved automatically. Even courts can dissolve it on the application of either of the parties. A partnership is not perpetual that is, it would be dissolved if any of the partners d ies. The business name is to be decided. If the personal name is kept for the partnership then no registration is required. It is however required to get the business name required. A separate tax file number is allotted to each of the partnerships. This refers to an Australian Business number. If people are employed in a partnership then various kinds of responsibilities would have to be fulfilled. These are such as including the employee payroll tax.[1]One of the most basic motives of the formation of a partnership is to earn a profit. Each of the partners has been allowed by law to participate in the management of the company. A partnership does not have a separate entity from its partners.[2] That means no legal entity has been granted to it by law. Attributes of a company A company has a separate legal entity. It is created by a charter or legislation. A corporation sole a kind of a company and has been recognized by the Australian law. One minimum shareholder or director is required. At least one director, who is a resident of Australia, should be present in each company. An annual audit is required to be carried out in every company. A proprietary limited company is the one which has a suffix pvt. ltd after the name of the company. This company cannot raise any capital from the general public by way of shares.[3] The shareholders liability is limited by various ways. It can be limited by way of a guarantee. The duties of the directors comprises of loyalty and the duty of care. They have to look after the interests of the company. They are accountable to the various stakeholders of a company. Full disclosure needs to be given by the directors if they have some interest matter in the transaction that is to take place in a company. Selling of shares of a company can be one way of transferring the ownership in a company. The taxation rates for a company are more favorable. A full foreign ownership in case of a company has been permitted by the Australian law. A company is perpetual in succession as the company is not affected by the death of any directors as it is a separate legal entity. Also, the profits which the company earns can be repatriated. Corporate governance is one of the matters which can be included in the scope of the duties of the directors. A company generally has a wider access to large capital. Also, it is easier for a company to widen its skill base. Advice for Pat and Helen In the light of the attributes stated above, Pat and Helen should start off as a partnership firm as regards to the ease of formation and registration. With minimal legal formalities required, the partnership can come into existence. Once they are stable in the market and also need credibility then they can opt for registering as a company. Difference between the liability of a partner in a partnership and a director of a company If the costs are incurred in a partnership then the liability of the partners is significantly large or unlimited. Every partner is in himself a principal and an agent in a partnership. In case, the partners act in a negligent manner, then their liability would be joint and several. This happens majorly in cases where there is no indemnity insurance. Each of the partners is responsible in the legal capacity and also in his financial capacity too. The major cause of problem for the partners arises when one of the partners faces insolvency. The director would be liable for the debts which are incurred on behalf of the company.[4] Also the directors, if comply with all the obligations, their liability would be limited to the extent that they would not be held personally liable for the debts or costs incurred. In breach of any directors duty, he may be liable personally. Scallop fishing in the waters of New SouthWales Scallop fishing in the New South Wales is dependent on the system of quotas. Scallops are known to be the bivalve molluscs that that are laid unattached. These are attached to the seabed and also fed by the plankton. They can also swim in an active manner. Most of the times, the adults are sedentary. Basically King scallops are the ones that can be distributed through the Southern Australia. It means that these are caught from the waters of New South Wales. This fishing of the commercial scallop is basically undertaken in the New South Wales in the month of May and October. Approximately, 175.8 tonnes of scallops are harvested between July to June.[6] Issue The issue in this question has arisen as to the quota of the scallop fishing given to a person fishing the same in the New South Wales and the quota given to a company for fishing scallops.[7] Rule The rule used in the question would the Scallop Fishing and Marketing Act. The fisheries legislation which is the Fisheries Management Act, 1994 is the legislation which is used in the New South Wales. This legislation came from the Fisheries and Oyster Farms Act, 1935. Most of the provisions of this old Act were carried forward to the new Act. The Corporations Act, 2001 seeks to state the fact that a company being a separate legal entity has the powers of its own. A company being an entity with a totally separate existence and owns a distinct entity with powers such as disposal of the property. It has the powers of that of an individual. The companies can also enter into contracts on their behalf.[8] Application The application of this rule in the present situation can be analyzed from the fact that licenses are given under this new Act to the ones who want to fish scallop. The licenses are given for fishing and are made renewable. If the provisions of the Act are breached then these licenses are taken back.[9] Once, a minor fishery for the fishing of the P. fumatus was upheld in the New South Wales waters. It was managed in the form of the limited entry drive fishery. This fishery had allowed the 4 licensed operators which had helped in producing very small amounts of scallop. These fisheries of New South Wales are a fishery that is highly intermittent. These are managed on the basis of needs of the people. However, this had happened in the past. This is not the case now. The quota as have been fixed now on the basis of the one size fits all approach.[10] A company is treated as having a separate existence from its owners. This rule pervades the company law. In the case of Soloman vs. Solom an, (1896)[11] this principle has been fairly illustrated. It was stated that a company has an independent existence[12]. Therefore in the present case this issue can be solved with the help of the rule of separate legal entity. For example if a person is allowed under the laws of the New South Wales to fish scallop of around 55 tonnes then if registered as a company, then the company would be allowed to fish scallop of around 110 tonnes. Conclusion The conclusion of this issue is that proper quotas have been made.[13] The fishing of the scallops is one of the key components of the management. The spatial management of this scallop is crucial. The strategy of the one size fits all approach is that it is based on the limit reference point which is applied to the quotas of each of the fisheries. The separate legal entity principle is one of the principles which are fundamental to the company law. This is applied on a global basis. A company is treated as having a separate existence from its owners. This rule pervades the company law. Therefore, the advice given by the son in this case is correct as the company can fish double the amount the scallop which an individual person can fish. Bibliography Sandra E. Shumway and G. Jay Parsons, Scallops: Biology, Ecology, Aquaculture, and Fisheries Elsevier (3rd edn., Elsevier 2016)1127 Australasian Legal Information Institute, Corporations Act 2001 - Sect 1.5.1(2017) https://www.austlii.edu.au/au/legis/cth/num_act/ca2001172/s1.5.1.html Australasian Legal Information Institute, Corporations Law - Part 1.5 -- Small Business Guide (2017) https://www.austlii.edu.au/au/legis/cth/repealed_act/cl184/sbg.html Australian Fisheries Management Authority, Bass Strait Central Zone Scallop Fishery(2016) https://www.afma.gov.au/fisheries/bass-strait-central-zone-scallop-fishery/ Australian Government, Assessment of the South Australian Scallop and Turbo Fisheries(2007) https://www.environment.gov.au/system/files/pages/7b6655ed-9172-471f-9d78-037c180f2827/files/report-07.pdf Avv. Serena de Palma, Salomon V Salomon Co [U.K. 1897](2017) https://www00.unibg.it/dati/corsi/65081/62134-Salomon%20v%20Salomon%20%20Co.pdf. Business Victoria, Company (2016) https://www.business.vic.gov.au/setting-up-a-business/business-structure/company Business, Can I be personally liable for debts of the business or company?(2016) https://www.business.gov.au/info/plan-and-start/start-your-business/business-structure/change-business-structure/sole-trader-to-a-company/what-could-i-be-personally-liable-for-as-a-sole-trader-vs-a-company-director/can-i-be-personally-liable-for-debts-of-the-business-or-company Chad, 5 situations where a company Director could be personally liable for its debts(2015) https://rapseygriffiths.com.au/director-liable-compadebts-insolvency-newcastle-nsw/ FAO Corporate Document Repository , Part II: Fisheries Rights In Legislation(2017) https://www.fao.org/docrep/007/y5672e/y5672e05.htm Organisation for Economic Co-operation and Development, Country Note On Fisheries Management Systems Australia(2017) https://www.oecd.org/australia/34427707.pdf Tasmanian Government, Company - advantages and disadvantages(2015) https://www.business.tas.gov.au/starting-a-business/choosing-a-business-structure-intro/proprietary-company-advantages-and-disadvantages