The final exam has to be written in no more than 3000 words. All the answers have to written as per the IRAC principle that is the Issue, Rule, Application and Conclusion method in which you do not...

Company and Commercial Law
TABLE OF CONTENTS
ANSWERS    3
Answer 1. Type of business structure and status of individuals in regards to the business    3
Answer 2. Whether Julio/their partners are liable for the damages suffered by X and legal risk under contract    4
Answer 3. Whether Julio/their partners are liable for the damages suffered by Y and legal risk under tort of negligent misrepresentation    7
Answer 4. What are their options?    9
REFERENCES    11
ANSWERS
Commercial law is also considered as one of the significant area of law that mainly deals with the business activities related with trade among the businesses and consumers. The key purpose of commercial and corporate law is to govern the business along with their transactions so that it may not negatively impact the setting (Edelman, 2016). Along with this, it has been assessed that commercial law also so assist the management in realizing the ethics and practices that they are required to follow to run authentic business.
Answer 1. Type of business structure and status of individuals in regards to the business
Case scenario,
The case scenario states that Julio, Carolyn and Trisha decided to set up their own business called Finance R’Us. The businesses mainly focus on providing different forms of financial advices to their clients so that they may engage in taking effective investment decision. Julio experience in imparting tax advice, while, Carolyn has a passion for accounting and Trisha knows the ‘ins and outs’ of investment. All the partners have decided to invest equal money within the business and share equal profit. The case also state that company fall short on the money so Julie sister Sarah provide them with the loan of $40,000 on which she will receive per year 2% of net profit over the five years.
With the help of considering the case scenario, it has been assessed that Finance R’Us basically features partnership structure of their business. Under this type of business structure company focuses on operating the activities with the co-workers that share the entire income as well as profit ratio. Along with this, all the co-workers (i.e. partners) may act on behalf of each other within the business. However, like the business structure of sole trader it has been assessed that partnership structure are not separate from the entity (Liu and Wei, 2018).
Through reviewing the business structure of Finance R’Us it has been stated that partnership structure are easier to formulate as individual mutually agrees to all the terms and condition and carryout business under the trading name. However, it has been also stated that partnership business structure are less expensive than the company as it do not requires additional cost associated with setting up the company. Apart from this, partnership business structure also combines the capitals as well as expertise of a number of people so that it may impart adequate services in the business (Cotton, 2015).
Furthermore, it has been also reviewed that different people are involved in the business that include Julio, Carolyn, Trisha and Sarah that overall support the partnership firm that is Finance R’ Us in performing their activities and business practices. Within the partnership business structure, company has been engaged in discussing status of all the workers in regards to the business. It mainly includes-
1. Julio- Julio is among the member that decided to go into the business in order to attain higher profitability. The key status of Julio is to perform management related activities as he is among the partners who have set up the business. On the other hand, status of Julio also centers on imparting the tax advices to the clients so that it may lead to save their taxation amount (Ameyaw and Chan, 2016).
2. Carolyn- Carolyn is also among the partners who have invested their capitals in setting by the partnership firm that is Finance R’Us. The position of Carolyn in the business is within the management team. Along with this, Carolyn also performs the activities and function related with accounting within the premises.
3. Trisha- The status of Trisha within the business focuses on management area as she has also invested capital for setting up the firm. In addition to this, position of Trisha within Finance R’Us states that she will be handling in imparting financial advices related ins and outs of the investment.
4. Sarah- The position of Sarah in the business is merely as an investor to gain 2% of share in the net profit for every 5 years.
However, through assessing the partnership business structure it has been stated that it ensures sharing of responsibilities that would directly impact the overall efficiency and effectiveness of the business (McMeeking, Baskerville and Sim, 2017). On the other hand, partnership business structure would also help in avoiding the level of conflict as it ensures proper division of the asset as well as responsibilities within the environment.
Answer 2. Whether Julio/their partners are liable for the damages suffered by X and legal risk under contract
Issue
Through reviewing the case it was stated that Julio has advices client X to purchase the real estate property with making a mistake that he was no aware regarding latest ruling made by Australian Tax Office (ATO). Thus, X had to pay additional amount of $15,000 in the tax because of incorrect advice given by Julio.
Rule
With the help of this case it has been assessed that Julio/their partners are responsible for all the damages and additional amount suffered by X. Due to the mistake while providing advice to client he has to pay extra $15000 in the tax that will act as the expense for him. Julio has been providing taxation advice in the name of Finance R’Us firm. However, the rule states that Julio is required to be updated while imparting financial or taxation advices to their clients so that he may not impart improper advices that impact the budget of client. Therefore, Julio needs to have knowledge regarding the standard and latest ruling by the Australian Tax Office so that it may deliver proper financial and taxation services to their customers.
Applicable
Therefore, in this case all Julio and their all partners are liable for the damages suffered by X. With the help of undertaking the analysis it has been stated that Finance R’Us features partnership business structure in which all the three members has mutually agreed on the terms as well as rules mentioned on the serviette. However, through discussing the liability of Julio and his business partners it has been stated that it results in arising certain legal risks under the contract that lead to further impact the overall business practices and activities of the partnership firm. The legal risks under the contract are as follows-...