Ahmad, Ah Chong and Samy wish to start up a new company. They are however confused as to which type of company to set up. They have a choice of Partnership, Sole-Proprietor and Corporation. They are unsure of the positive and negative issues that may be attached to each of these institutions.

Whilst the company was being set up, Ah Chong, left to Japan to purchase a building for business purpose for the company. In Japan, Ah Chong faced issues that he could not decide on, with regards to purchasing the building. He calls Ahmad and Samy but is unable to reach them. He makes a decision out of absolute necessity and purchases the building. Later Ahmad and Samy dispute this purchase.

Advise Ahmad, Ah Chong and Samy on the best form of business entity to set up. (25 marks)

On the issue of purchasing the building, can Ah Chong be held liable?