Business Structure Of A Smartphone App Essay

796 Words Sep 15th, 2016 4 Pages
Rohit, Ariel, Charn and Levi have come across a great business idea to introduce a smartphone app. Furthermore, each of them readies to participate in operating the business in their professional capacity. In determining which business structure suits them most there are certain factors that need to be counted. In which capacity each of them ready to contribute to the business? Which business structure would give the minimum restrictions to their business? What are the gains and losses from choosing that structure? As their intention is to start small and considering the fact that each of them ready engage in business activities the appropriate business structure would be a General Partnership.

S.5 Partnership Act 1958 (Vic) defines a partnership as a relationship between two or more people, carrying on a business in common. Arising from the definition, there are three essential elements which are required to form a partnership which Rohit, Ariel, Charn and Levi are already sharing in common. Those are ‘carrying on a business’, ‘in common’ and ‘a view of profit’. In here each of them is willing to contribute to the partnership in their profession capacity and expecting a worldwide success. As recognised by the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004)1 case, in partnership ‘what matter is what each party by words and conduct would have led a reasonable person to the position of the other party to believe’. In that case, they are eligible to form a…

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