Case Study: Groundhog World Bill once had fame and fortune as a result of a role he played in a movie about groundhogs. Bill has now fallen on hard times. So Bill has decided to try to profit on his past glory by developing a theme park based loosely on the movie. He plans to call his new theme park "Groundhog World". Bill needed money to launch Groundhog World, so he approached his sister, Anna, for help. Anna agreed to give Bill $3million to fund Groundhog World. Bill agreed that he would pay Anna back over ten years. Instead of interest, Anna agreed that she would accept ten percent of the profits of Groundhog World, plus the payment of the principal amount owingAnna and Bill agreed that Bill would run the day to day operations of Groundhog World since Anna already had a successful career as an investment banker. Anna would defer to Bill in terms of operational decisions on a day to day basis. However, Anna was not content to simply give Bill so much money. She demanded, and Bill agreed, that she be able to view the books and finances of Groundhog World whenever she wanted. Anna and Bill also agreed that they would meet monthly to discuss the operations of Groundhog World. Anna, being quite astute, also insisted that her name never appear on any contracts, invoices, letterhead, or other materials related to Groundhog World. To the outside world, Groundhog World was represented as "Bill, doing business as Groundhog World".The issue of the nature of the relaConship between Bill and Anna has recently come under scruCny. Mila was a guest at the park when a Groundhog World employee negligently ran her over with a golf cart. It is clear that Groundhog World is vicariously liable for its employee's negligence. The real quesCon is whether Mila can sue only Bill, on the argument that Bill is operaCng the park as a sole proprietorship, or whether Mila can sue Bill and Anna, on the argument that they are in a partnership with each other. Given Anna's wealth, Mila would prefer to characterize their relaConship as a partnership so that she can access Anna's assets.

Case Study Questions 1. What test will the courts apply to determine if Bill and Anna are in a partnership? (In other words, articulate the legal test for a partnership's existence.) 2. Make an argument in favour of the position that Bill and Anna are not partners. 3. Make an argument in favour of the position that Bill and Anna are partners.

Case study questions, con't 4. Suppose that before any accidents occurred at Groundhog World, Anna decided that it would be best if she and Bill formed a corporation that would own Groundhog World. She explained to Bill that she was concerned about attracting personal liability if they were found to be in a partnership. Anna is very wealthy and wants to shield her assets. Explain why purchasing shares in a corporation and being a shareholder offer Anna more protection than being a partner in a partnership.