1The limited liability partnership is a response to concerns about professionals' exposure to liability for their partners' malpractice. What is the nature of the liability created by the partnership form? How does the creation of an LLP address this liability concern? Is it appropriate that accountants and lawyers, for example, enjoy limited liability? Is there a downside for a law or accounting firm to converting to an LLP?

2What are the circumstances in which a partnership may be found to exist? What steps can be taken to avoid a finding of partnership? How can the consequences of being found a partner be minimized?

3Jody Ingalls is a recent university graduate with a BSc in kinesiology. As she was having difficulty finding a job, Jody decided that she could create her own job by opening a fitness club. As luck would have it, she saw an advertisemen t in a Hali fax newspaper featuring franchise opportunities in the fitness industry.Jody responded to the ad and the franchise owner showed her the financial statements for a "Fit for Life" fitness franchise in a Halifax suburb. The income statements indicated that the franchise had made $100000 per year for the past several years. Jody was extremely excited and agreed to lease it for $50 000 per year for a five-year period. She signed the contract and started carrying on the business. Jody worked 12- hour days for a year but was not able to make a profit, and now she wants out of her contract. Can Jody get out of the agreement? Explain. Would your answer be different if the franchise was located New in Brunswick? Explain. What are the legal risks associated with "purchasing" a franchise? How can the risks be managed?