Last 6 notes on Business Law
Last 6 notes on Business Law
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Business Law BMO742 AY2014 Semester 1 Lecture 9 Remedies Remedies An Remedies What the court awards OVE rview the injured party Common Law Equntable Remedies Remedies Discretionary A5 of right Sped c In39unctions Rescission Dama es Quantum Performance J g Meruit Prohibitory L Mandatory Damagg Monetary compensation awarded to injured party for breach of contract 3 Categories of Damagg Damages for pecuniary losses Damages for nonpecuniary losses Liquidated Damages Damages for Pecuniary Losses Compensation for monetary losses Eg loss of profits wasted expenses cost of rectifying defects Generally can be recovered Damages for NonPecuniary Lss Damages for NonPecuniary Losses NonPecuniary Loss Not a direct monetary loss Examples mental distress disappointment General Rule Contract law does NOT allow claims for nonpecuniary losses Exception Where main object of contract is to provide enjoyment pleasure or comfort Eg Contract with tour agency to provide a holiday se 5 ment of Dama es The court will not order compensation for every loss suffered 2 important limitations Remoteness of damage Mitigation P cannot claim if loss is too remote ie not connected closely enough with the breach I General rule Natural and ordinary loss 9 D is liable Unusual or special losses 9 D not liable unless D aware of special circumstances and had agreed to supply goods services for that purpose Mitigation When there is a breach of contract plaintiff must take reasonable steps to try to minimise his loss Eg Seller fails to deliver goods Buyer should try to obtain a substitute from the market Eg Company charters a ship to deliver cargo but the shipowner fails to provide the ship Company should try to charter another ship to carry the cargo Liqui ate Damages Liquidated Damages Clause Term in the contract Fixes in advance sum payable in the event of a breach of contract A genuine preestimate of loss Effect of a Liquidated Damages Clause Plaintiff entitled to claim amount stated in LB Need not prove his actual loss Liquidated Damages Example of a LD clause Construction contract between XYZ Contractors and Company ABC states that If XYZ is 10 days late in completing the building what amount can ABC claim Liqui ate Damages A penalty clause Provides for payment of a sum of money much greater than the genuine preestimate of loss Purpose To punish party in breach of contract and to pressurize him Effect of penalty clause Court will not allow penalty to be recovered Plaintiff must prove his loss and court will fix amount of damages payable Liqui ate Damages Example of Penalty Clause X engagesY to paint his house for a fee of 200 The contract between X andY states In the event that Y fails to paint the house Y will payX 150000 as damages The cost of getting another painter to paint the house would be 250 IfY fails to paint the house can X claim 150000 based on what is stated in the contract Distinguishing 3 LD I a Penalty Dunlop Pneumatic Tyres Co v New Garage 1915 1 Describing amount as penalty or as liquidated damages not conclusive Court will look at the substance ofthe agreement 2 Ifamount to be paid is excessive and unreasonable compared to the biggest possible loss Probably a penalty 3 lfa single lump sum is payable regardless of how serious the breach is the sum is likely to be a penalty 4 fthere was a genuine attempt to estimate the loss beforehand amount payable will not be considered a penalty even if it was difficult to calculate the loss in advance Equitable Remedies I 3 types of equitable remedies 1 Specific Performance 2 Injunction 3 Rescission Hewe Seereh Wet Eeejeh Eleeei e eeeeh A een tiein Heme Delhrenj Hee er emieee Tirelt e St Heme New SpellTie Bueineee I 39IIpinien Enten teinment eeturee Eemmunityr F Eemmuriitfy39 News I Ereeiel Seehe I Ehewitiee Fund I H39tueriee 1 Birth I 12 tierie 1 Tue e I E quake Hep EFEHWEE et Fi39l u ied Wedmeedey Hearember ESL EIIIDEIE r 2 25 F39quot r r It the er Fen We ester gamma 7 r mm 3 Sentiment In er E I ing ellymeety leer H w tetehee teerue teerel matinee at h Hen euet ae Ely eeeciagtee Freee HUNG Fi HE F39s Eh hee 1 Amie hewl etihg them the neea re leee ee d ter39 51942 m ll eh et ee eh IZHI39ti TLIeed er39ee t he the eier39tel rm 1 I eriee few ing yneetgg eereu39h eeq Ehn39eti A etiri heeee eeiel u in eee re remit be M from title I37 centm f5 dietsfay A 1 A U 1 1 et39 shnetE39s eecztj39rl Lheuee in The feu39hulle re eejnie emIE ted eeeme Eileen Hag mag megaray me hemTye tren39h the eeem ef thee714 lehlhg wh 5E em km the ef reiagutieel them quot1 E393EEnte r r e ithe meet eaFlee NEE2 eeeeneive were t eu39t eeew ee d in 339 eeieh 915 55 5quot ij ig39t39g m39t39m v 1 1 m A ij me tehe weerquot weeure enle eu Etl 39th Ehnetle e eel El g WM mammal The eeWu e pert t e peir The F er he t ie CheerSEE tee e Heret et mueeum ih thjh r 39i quot mm39 m The Lereviue euetiri FEETE5ij ihgeer39ernjir y wee eet E33 e eheeeeht eeee wh eh teteheel 2 quot a HH J1 L Fl I N DEE 39 51435 m ll at tng w39 Eug in mi quot I ate mi iITiL L Lie eteher 2105 A a a 1 u 139 7 e I Etiii inquot W quot397 ti heee e li39leIIWgmed Emile DEM emien r 5 1 iMIME it 7 5 The EyeWu wee eele E33 hineee ee leetm Fieljert Gheeg te el ee Ehehg e Hung Heng Ellestem Ehn39etie39e eei v ific e rmance Specific Performance Court order Requires party in breach to do what he promised to do under the contract Granted when monetary damages are inadequate to compensate the plaintiff amp plaintiff prefers to have contract carried out Usually granted Contracts for the sale of rare items Contracts for the sale of land sale of a house I Usually NOT granted Contracts for personal service Contracts with continuing obligations that require constant supervision by the court I Orderfor SP must be followed otherwise defendant may be guilty of contempt of court andjaHed Injunctons Granted when party has promised NOT to do something in the contract Contract breaker has already carried out the act Mandatory Injunction 2 types of injunctions Prohibitory Injunction Mandatory Injunction Contract breaker has not yet carried out the act Prohibitory Injunction J In jun Prohibitory Injunction Court order Requires a person not to do something Appropriate when contract breaker intends to do something that he has promised not to do but has not actually done it yet Eg a court order which requires an employee not to compete with his eXemployer would be a prohibitory injunction Prohibitory Injunction Warner Bros Pictures v Nelson 1937 A film actress agreed with Warner Brothers that she would NOT work as an actress for anyone else during the period of her contract She made a contract with a third party to act in films Held Warner Bros Entitled to a prohibitory injunction Mandatory Injunction Mandatory Injunction Court order Requires party to do something to restore the situation to what it was before the breach eg to tear down a fence or demolish a building Appropriate when a party has promised in the contract NOT to do something but has already done what he is not supposed to do Mandatry Injunction Example X buys a piece of land fromY In the contract X promises not to build any fences on theland X builds a fence on the land Y can ask for mandatory injunction requiring Xto tear down fence The End Business Law BMO742 AY 2014 Semester 1 Lecture 10 Law of Agency The fundamental question thatT Agent must ask Does A have the A authority to bind P A acts on behalf of P to make a legally binding contract between P and T Principal P Third Party T If A has authority P is bound Car Dealer Described as Authorised Agent for XYZ brand cars Manufacturer sells car to dealer Manufacturer ofXYZ brand cars Dealer sells car tO CUStOIIlCl Customer Dealer is making the contract as a principal not as an agent for the manufacturer Customer s rights under the contract are against the dealer How does an agent obtain the authority to bind his Principal Actual Authority Express or implied Apparent Authority Agency by ratification Focus is on Whether P has given A permission to carry out the act in question Agent A a P gives A the perm1ss1on to carry out the act in question The permission is given orally or in writing Principal P P bound A acts on behalf of P to make a contract between P and T Third Party T Agent A P does not expressly say that A is authorised but permission is implied from the circumstances eg if P appoints A to a certain position P is taken to have authorised A to do things Within the usual scope of A s pom on Principal P P bound Focus is on Whether P has given A permission to carry out the act in question A acts on behalf of P to make a contract between P and T Third Party T Focus is on Whether A appears to T to have the necessary authority Whether P has actually given A authority is not important Agent A A acts on behalf of P to make a contract between P and T g P bound Principal Party P T 1 Representation by P to T that A is authorized 2 T relies on the representation in contracting with A Agency Create y Estoppei Freeman amp Lockyer v Buckhurst Park Properties Ltd 1964 K acted as if he were the managing director even though he was not appointed as one Company was aware but did not stop him On behalf ofthe company K engaged a firm of architects The architects provided services but were not paid When sued the company argued that K did not have the authority to engage the architects Was the company liable A ency Created by Estop Example Andy is employed as IT manager by Pixar Ltd For the last 5 years Andy has ordered software on Pixar s behalf from Ted Pixar has always paid promptly for the software ordered by Andy Andy recently resigned from Pixar Pixar fails to inform Ted about Andy s resignation Andy has ordered 10 copies of Microsoft Vista from Ted and Pixar has received the bill Pixar will be liable to pay for the software Agent does an act which is notauthonsed Principal rejects Principal ratifies adopts or transaction confirms an unauthorised act I I f conditions for effective principa is not bound ratification are met Principal bound Law treats the unauthorised act as authorised Conditions for Effective Ratification For ratification to be effective such that P and T are boundy 1 Agent must disclose that he is acting on behalf of a principal see Keighley Maxsted amp Co v Durant 1901 Principal must exist at the time the agent made the unauthorised contract Ratification must be done within a reasonable time or within the time fixed for performance Aency by Ratifiction Peter instructs Alan to buy goods on his behalf provided the goods do not cost more than 100 On Peter s behalf Alan orders goods priced at 200 from Trudy Since Alan s order is unauthorised Peter can choose to reject order Not liable if he doesn t pay for goods OR Peter can ratify Peter and Trudy bound Peter liable to pay for goods Duty to follow P s instructions Duty to act with care and skill Duty not to accept bribes What remedies are available to P ifA takes a bribe see ahesan Duty to avoid a conflict of interest Duty to account for money goods received on P s behaH 1 Right to remuneration commission 2 Right to be reimbursed for expenses and liabilities 3 Right of lien An agency relationship may be terminated by 1 By agreement of both parties 2 By revocation 3 By the death insanity or bankruptcy ofthe principal or agent The End BMO742 Business Law AY2014 Semester 1 Lecture 11 Introduction to Intellectual Property Intellectual Property Creations of the mind Treated as property Can be owned sold assigned rented censed Intellectual Property Rights What you can do with it What other people w do with it Types of IP in Singapore Trade Marks Patents Copyright Registered Designs Plant Varieties Layout Designs of Integrated Circuits Trade Marks Trade Marks The RitzCarltn Trade Marks CHEESEtan gas ag E http tmsearchiposgov sgeTMSearcheRegisterSe rvletPOp82284O4122464032033962468344442761408 148043962424143614682ampeRSrchTypeSODampeRTm No35242084228421252084220320012002284114441 362 http tmsearchiposgov sgeTMSearch eRegisterServletO ps304540814681316239214601432128844245472239214364 44434682ampeRSrchTypeSODamp RTmNo340120022363204 32245236422002081296012801403 a Trad Mark A sign used by a person in the course of trade to distinguish his goods and services from those of other traders Can consist of a letter word L name device shape or color suntanme AI ELI WEE r 4 til 1 Can be sold assigned or rented Hcensed Relevant Law Trade Marks Act Protecti l1 ur Trademark Protection is dependent on registration Apply for registration with the Trade Mark Registry at the Intellectual Property Office of Singapore IPOS Protection is territorial in nature For protection outside Singapore must file applications in the countries concerned either individually or through WIPO tion Requirement To register applicant must show that He is already using the mark or has a genuine intention to use it To trade in the goods services applied for Different classes of goods services under the International Classification ofGoods and Services ICGS eg Class 25 Clothing footwear headgear eg Class 32 Beers mineral and aerated waters Marks that do not have a distinctive character eg Registering Wong Descriptive marks Marks which merely indicate the quality quantity or intended purpose of the goods or services eg Registering Super or Best eg Registering BREATH EABLE for sanitary napkins Trade Marks that Cannt be Registere Marks that are exactly the Marks that could cause same as earlier marks for confusion the same category of goods eg registering Leevi s for service jeans Eg Registering Levi s for eg registering Levi s for jeans beachwear or swimwear Deceptive marks Marks which are against Eg Registering FROM public policy or morality DOWN UNDER in Eg Registering respect of goods made in Gambling is Good China GAMBLING IS GOOD Trad Marks Validity period upon registration 10 years Renewable for further periods of 10 years so long as the mark is used by the owner Symbol Indicates that the mark is a registered trade mark protected under the trade mark law Symbol T39V39 Indicates that the mark is used by the company as a trade mark Trade rk Infrin ement Infringement oftrade mark Using a similar or identical sign to trade in similar or identical goods services without the permission oftrade mark owner and the public is likely to be confused Eg setting up a stall selling coffee and toast and putting the Ya Kun Kaya Toast sign on the stall s signboard receipts and in advertisements I Remedies for trade mark infringement An injunction a court order to stop the infringement Account of profits Profits made from the infringement Damages ie monetary compensation Court order for the removal of any infringing sign Court order for the delivery up of infringing goods 39 1E aquot Passin O f a usiness Name To rt of Passing ff ftrade mark is not registered cannot sue for trade mark infringement Business owner must rely on tort of passing off To sue for passingoff following conditions must be satisfied There is goodwill or reputation attached to the Plaintiff s business Misrepresentation by defendant that is goods services are same as Plaintiff s by using similar name logo get UP Plaintiff is likely to suffer loss or damage Remedies for passing off Damages Injunction Account of profits rt of P ssi ng ff Jumbo Seafood Pte Ltd v Hong Kong Jumbo Seafood Pte E 1998 Plaintiff s seafood restaurant Jumbo Seafood Pte Ltd Operating since 1987 at East Coast Park UDMC seafood centre Enjoyed substantial revenue Had many good write ups in the press 1996 Defendant started seafood restaurant business under the name Hong Kong Jumbo Seafood Restaurant Evidence showed that people were confused thought that Defendant s restaurant was related to Plaintiff s Could the Plaintiffs apply to court to stop Defendants from using the name Hong Kong Jumbo Seafood Restaurant Protects inventions Patent owner can stop others from exploiting his invention for the duration of the patent lnven onr Product OR Process Apply with Patent Registry at IPOS to get protection Patent rights are territorial To get protection outside Singapore must file application in countries concerned either individually or through WIPO Patent registration is only valid for 20 years non renewable Relevant law Patents Act Invention must satisfy 3 criteria to be registered lnvention must be new ie Must not be already known to the public in Singapore or anywhere else in the world eg a medicine that can cure AIDS Invention must involve an inventive step ie Must be an improvement over an existing product process which is not obvious to a person skilled in that field Invention must be capable of industrial application ie Capable of physical or practical application Who does the patent belong to The inventor lf product was invented in the course of employment then unless employment contract states otherwise patent belongs to the employer Patent Infringement An invention is used sold or manufactured without the consent of the patent owner while the patent is in force Remedies An injunction to stop further infringement Order for infringing products to be delivered up or destroyed Damages Account of Profits Copyright Exclusive right to reproduce publish perform and communicate various works such as novels computer programs plays etc Protects the expression of ideas and facts Ideas alone are not protected by copynght Protection is automatic so long as the work is original AND is expressed in a tangible m such as a recording or writing Item of property Therefore can be assigned sold or licensed rented out for a fee Relevant law Copyright Act Type of Work Examples Literary Works Dramatic VVorks MusicalWorks Artistic Works Sound Recordings Films Books Newspaper orjournal articles Poems Cataogues Brochures Song lyrics Web pages Computer Programs Scripts for plays and films Musica scores Music ie melody and tunes Paintings Drawings Photographs Scuptures Music and other sounds recorded on tapes CDs etc Films recorded on VCDs DVDs etc Who owns the copyright How long does copyright last Literary dramatic musical and artistic works eg books song lyrics scripts Life of author 70 years Sound Recordings 70 years from year of release Films 70 years from year of release In general author ofthe work The employer where work is created in the course ofemployment unless employment contract states otherwise Sound Recordings Recording Company Films Producer Film Production Company Doing something which only the copyright owner can do without first obtaining his permission Eg Photocopying substantial portions of a book Eg Performing a play in public without permission from the writer ofthe play Eg Making copies of a film Eg Screening a film in public without prior permission Remedies Damages monetary compensation Account of profits Injunction Court order for infringing copies to be forfeited to the plaintiff or to be destroyed THE END Business Law BMO742 AY 2014 Semester 1 Lecture 8 Discharge of Contract La 1 MN YA MG PE39EL WTEEHMIINE 39 ntract Contracts may be discharged brought to an end in four ways Discharge by agreement Discharge by performance Discharge by breach Discharge by frustration iSChf e by A reement Discharge by Agreement Both parties agree to excuse the other from performance Consideration Each party s promise to excuse the other from performance Example Adarn contracts With SBS to hire a bus on May 1 Before May 1 he changes his plans and agrees With SBS to cancel his booking Can Adarn do so Discharge by Performance Each party has done what they promised they would do Contract comes to an end I However performance must be precise and exact 9 Otherwise party may sometimes not be entitled to payment Ecep ons Apportionment Act Principle of Substantial Performance Prevention of Performance Acceptance of Partial Performance I Severable or Divisible Contracts A p rt i o n nt Act Applies to certain periodical payments such as salary rent Such payments are deemed to accrue on a daily basis eg Employee who works for only 15 days entitled to be paid for 15 days work even though his contract says he is paid monthly Princile of Substantial Performance Applies when party has Hoenig V IsaaCS done most or all of what Decorator engag d t0 is required under the decorate and fohlSh flat contract for 750 BUT th Job was completed but ere are mlmor wardrobe door was faulty defects or omrssrons 1 bookshelf was too short Party entitled to contract Minor defects would cost price LESS sum for 55 to correct correcting defects Was decorator entitled to the contract price everable or Divisible Contracts Entire Contract Party not entitled to be paid unless he completes all that is required eg Cutter v Powell Severable or Divisible Contract Contract made up of smaller separate transactions Party entitled to be paid so long as he finishes one part of the contract Example Builder agrees to build a house for 250000 Contract states Builder to be paid 100000 when foundations completed To be Paid 100000 when main building structure completed To be paid 50000 when roof completed Must builder complete entire house before he is entitled to payment Anticipatory Breach One party indicates that he no longer wishes to perform the contract BEFORE the date for performance has arrived Anticipatory Breach Anticipatory Breach X indicates that he no longer intends to carry Y treats the contract as discharged Y can claim compensation at once No need to wait for date when performance is due out the contract Y treats contract as ongoing and insists on performance on the due date Y must carry out his part ofthe contract If contract is subsequently frustrated Y has no remedy nticipatory Breach 1 January X signs contract with Woodlands FC to play in new season which starts on 1 March 1 February X informs Woodlands FC that he will not play in the new season as he has an offer from Liverpool FC in UK 2 February Woodlands FC informs X that he must turn up for the new season on 1 March 15 February X dies from a sudden unexpected heart attack CAN WOODLANDS FC SUE X FOR BREACH OF CONTRACT I Frustration After a contract is formed an unforseeable event which is beyond the control of the parties occurs And either 39 Contract becomes impossible to perform OR I Contract becomes illegal to perform OR I Performance of the contract becomes radically different from What was originally envisaged I Effect of frustration I Contract is discharged Parties cannot be sued for not carrying out the contract Frustratin at Cmmn Law Destruction of the subject matter of the contract Taylor V Caldwell 1863 I Contract for the hire of a music hall for concert Fire destroyed the hall before the first day of the concert I Was the contract frustrated Frutratin at Cmmn Law Serious illness or incapacity of a party to a contract for the provision of personal serVices Condor V Barron Knights Ltd Contract of employment of a drummer by a band to play 7 nights a week Drummer developed illness could only play for 4 nights a week Why was the contract frustrated Frustration at Common Law Governmental Acquisition A change in the law making the contract illegal Singapore Woodcraft Manufacturing Ltd V Mok Ah czamlkow Ltd V ROhmPBX Sai Polish company 10 yam agmammt to use contracted to sell beet su ar prem1ses 1n return for g payment Of 1500 a month I Before delivery could be made Polish overnment Government took possess1on g of premises under the law banned all Sugar 6XPOITS Why was tha contract I Contract frustrated frustrated Situations Which D Nt Amount to Frustration In some situations even though circumstances have changed affected party must still carry out the contract 9 otherwise he can be sued for breach Examples Where a contract subsequently becomes more difficult or expensive to perform Davis Contractors V Fareham UDC I Self Induced Frustration ie Contract cannot be carried out because of the conduct of one of the parties The Super Servant Two The Suer Servant Two o D owner of 2 ships 551 552 Contract for D to transport P s drilling rig using either 551 or 552 D decides to use 552 to transport P s rig SSl already being used for contracts with other customers Is the contract between P and D frustrated Effects of Frustration Effects of frustration l 2 3 Contract is discharged comes to an end Parties released from all future obligations Obligation already due before frustration still has to be performed Obligations relating to the payment of money Effects of frustration are stated in the Frustrated Contracts Act FCA I Under the FCAz Any money paid before the contract is frustrated can generally be recovered I Example X pays Y a deposit of 500 under a contract to rent a music hall Before the rental commences the music hall is destroyed in a fire X can get back his deposit I Under the FCA Any money payable under the contract at the time of frustration no longer has to be paid I Example I Contract requires X to pay an up front 10 deposit but he has not paid it yet at the time of the frustration X need not pay it anymore Effects f Frustration Under the FCA If expenses have been incurred in performing the contract the person incurring the expenses may be allowed to retain or recover his expenses Example B engages A to build a house and pays a deposit of 5000 A incurs expenses of 5000 paying for materials and starts work Halfway through the structure is destroyed by fire A can keep the deposit of 5000 Effects f Frustration Under the FCA If a person obtains a valuable benefit before frustration the court may require him to pay a reasonable sum for the benefit he received Example A rents a music hall from B for 10 days for 1000 After using the hall for rehearsals for 3 days the hall is destroyed by fire A must pay B a reasonable sum 300 since he has received a valuable benefit ie use of the hall for 3 days Frce Majeure Clauses What happens to the contract should certain events occur eg war riots natural disasters labour and raw material shortages Useful to have allows parties to treat contract as discharged in situations that would not be considered frustration under common law Coverage of force majeure clause up to parties to negotiate Parties can even choose to suspend the contract for a period oftime first Frce Majeure Clauses Force Majeure Neither party to this contract shall be liable for failing to perform the contract iftheir failure is a result of an event of force majeure which is defined as labour disputes raw material shortages and acts ofGod Should such an event occur performance ofthe contract will be suspended for 14 days fthe event continues after 14 days the contract shall be deemed to be discharged Shem fume majeure Pulau Buka Sitil stabiiiises w Hiram EH armam Ehaill has mrlimnradl Hairliialr India trial it has dammed lama majeune an same Inf its musinmers in a statamnt Irglgaaad an Emmy Frame majeure is a mmnnm ange in i 1fE tE h t ham digs ile liability wiiian n m event m u mumumslanme beynnrd the mime p nmum 7 Shall l1 EHII39I M39lE EEJI39IiEl39 manila Epi rl that it has damaged I W5 the demramn farm majiaum uni same if its camera in a pr statement mails ih l Eh il i3 U EhiE t manager can Sunday 51r PHDTIE JTEE FANG QMEI EII TIIE lg its matum s and WISHES Hi nil gmup 39um agream mt j Explainad Mr Vi l i hiumi managing Haulianit all Energy mugulmn y Fewin and GEM Mr LEE Tau Vang chainingquot Eff Shall Enmpamias in Eilr li ir in a mass l marl We un mn thatme mjaum has been deal md um E l lE Inf um nusmtumem We mn nu In he in dis uaainns nunquot uuslnmara tn addrass their supplyr m pmdunt needs and in minimise any putantia l imp in mam lll Change in Circumstances Summary Event Beyond Parties Control occurs Does the event amount to Yes frustration at common law Contract is Discharged No Is there a force majeure clause which covers the event Yes Contract is discharged suspended depending on what the force No majeure clause says Affected party must still carry out the contract THE END Business Law Business Organizations xi jj ll r 739 Ly fgwMj ggfw 1 wi J CWL Ji d lhw 1 ros 241 9 i v 0 11311125 w 1s i1 h n i Unincorporated Incorporated 39 Sole Proprietorship 39 Company 39 Partnership 39 Limited Liability Partnership LLP I i ros 341 Unincorporafed 39 Merely an exten in 6 individual own rq 1quot f 1 391 f1 1 if 39 39 39T39 7 7quot 1 t i r 71 1 1 1 1 W 157W 1 51 1 1 1 1 1 1 1 1 1 1 1 1 1 1 i i L L 7 quot 393 7 7 quot 11 rquot V 7r L J g 1 739 J 1quot7quot 1 1212777777 111 ros 441 4 INCORPORATED BUSINESS ORGANIZATIONS Separat legal ntity Can have its own rights and obligations ros 541 BUSINESS ORGANIZATIONS Which Question to business ask do I want organisation to be should I f separated from ChOO s e my busine s s ros 641 UNINCO RP f x 4 l I RATED Owned and operated by 0116 p fSO 2 TI RIET Merely an extension of the owner ros 941 UNINCORPORATED BUSINESS ORGANIZATIONS SOLE PROPRIETORSHIP Business expenses are deductible in determining taxable income Employees are the personal employees of the owner ros 1041 UNINQQBPQBATED BHSINESS IZATIQNS SQLE PBQPBIETQBSHIP r W K garm j 7 in r 7 Ni Most common busn iganization for majority f small businesses r051141 9 UNINCORPORATED BUSINESS ORGANIZATIONS SOLE PROPRIETORSHIP ADVANTAGES Pro ts belong entirely to sole proprietor No need to share with anyone else r051241 10 UNINCORPORATED BUSINESS ORGANIZATIONS SOLE PROPRIETORSHIP ADVANTAGES Register business under the Business Registration Act by submitting an online application with the Accounting and Corporate Regulatory Authority ACRA Commencement easy ros 1341 11 UNINCORPORATED BUSINESS ORGANIZATIONS SOLE PROPRIETORSHIP ADVANTAGES Termination easy Sole proprietor need only send a notice of termination to ACRA Within one month of cessation of business ros 1341 12 UNINCORPORATED BUSINESS ORGANIZATIONS SOLE PROPRIETORSHIP ADVANTAGES Management The sole He will have less management proprietor has full control and con ict as he need not report authority over the business to any other person ros 1541 13 UNINCORPORATED BUSINESS ORGANIZATIONS SOLE PROPRIETORSHIP DISADVANTAGES Limited capital Not Dif cult to obtain large enough funds cannot loans from nancial expand institutions l Ability to borrow depends on availability of personal assets to be used as security for loans UNINCQRPQRATED BUSINESS QRGANIZATIQNS SQLE PRQPRIETQRSHIP DISADVANTAGES Sole proprietor owns 1 Sgg arat o busmess L r f EL f 15 UNINCORPORATED BUSINESS ORGANIZATIONS SOLE PROPRIETORSHIP DISADVANTAGES Death of sole proprietor I NO continuity in existence end of bus1ness Mental incapacity bankruptcy I end of business ros 1941 16 UNINCORPORATED BUSINESS ORGANIZATIONS SOLE PROPRIETORSHIP DISADVANTAGES Sole proprietor can be sued No separate entity same personally for debts Of the identit y bus1ness Personal assets of sole Failure to pay debts can proprietor can be seized to result in sole proprietor satisfy any judgement debt being declared a bankrupt ros 1841 17 UNINCORPORATED BUSINESS ORGANIZATIONS SOLE PROPRIETORSHIP DISADVANTAGES Limited management skill the sole proprietor may not be able to expand his business as he may be limited by his management skills ros 2041 18 A partnership is a business owned and operated by two or more persons The partners normally enter into a partnership agreement The partnership agreement is a contract between the partners ros 22141 19 Unincorpratd Business Oranisaons Partnership Terrns of Prtnership reement Vi v F q I Management of Partnership Who is responsible for managing the business Dissolution of Partnership How can the partnership be dissolved What happens if one partner dies ros 2341 20 Unincorporated Business Organizations Earner Dissolution A partnership may be dissolved in the following ways By one partner giving a notice to the other partners to dissolve the partnership If the partnership is set up for a xed term and upon expiry of the xed term ros 2441 One of the partners becomes bankrupt One of the partners dies 21 Registration commencement registration with ACRA eg Lim Peng San amp Co Partners are collectively called a rm ros 2741 22 quot Enquot x l 39 T 1 l i HIP a 39 l i l w i i l J l l V v i lm rgt r Lain 39 lt quot quot 7 1457 m J quot 1 w W L H x l 1 l l quotquot71 H l i H 1 H 7 u i H y h x 7555 55 41 7 3 L J Partners incur unlimited NO separate entity personal liability for all debts amp legal Obligations of business ros 2841 Each partner is an agent for all other partners When a partner acts with either actual or implied authority all other partners become liable for his her acts ros 2941 24 Each partner has joint and several liability ie a person who has a Claim against the partnership can Choose to sue either all of the partners together or any individual partner No separate entity ros 3041 25 NO separate entity Partnership ceases to exist upon the death or bankruptcy of the partners ros 3141 26 INC ITE A partnership but an incorporated entity Minimum 2 partners Maximum no limit Has to be registered with ACRA under the Limited Liability Partnerships Act ros 3241 27 Partners generally have limited liability for the debts of the business Partners are only required to contribute to the extent of their investment in the business and are not liable for any debts that exceed their investment in the business ros 3341 28 No joint and several liability of the partners Partners cannot be sued individually LLP can sue and be sued in its own name Property of an LLP belongs to the partnership and is not personal property of individual partner ros 3441 29 of partners Partnership agreement governs relatio k I ros 3541 30 n X 1 f J S 7339L i Cwj i iEE II E E 25quot l I t A 4 NIZATI A company is a separate legal entity Members Company Company are not has its own can own liable for rights and assets in its losses of obligations own name the company r083641 Company enjoys Creditors of perpetual the existence company ie will cannot sue continue to members of exist even if the its company members die or change 31 The Companies Act governs companies to incorporate a company any person above the age of 18 years needs to le an application at ACRA Incorporation is more complex than the setting up of a sole proprietorship or a partnership ros 4041 32 Members not liable for company s losses Creditors cannot sue the members of the company Company enjoys perpetual existence Disadvantages More legal formalities to comply with e g appointment of directors company secretary auditors filing annual returns amp conducting annual general meetings 33 Thank You 34
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