C&L Dental Practice

Dr Cleo and Dr Leo set up C & L Dental Practice, an ordinary partnership in 2016 both were well renowned experienced dentists and they decided it would give them more returns if they opened their own Practice. Each invested towards the start upon the business as follows:

Dr Cleo P200,000

Dr Leo P100,000

The two did not draw up a Deed of Partnership as they had been very good friends and long time work mates. Unfortunately within the first year their relationship became sour. D r Cleo worked half the hours he was supposed to work but all the same demanded half the profits. Dr Leo worked extra hours to cover up for his defaulting friend and was not pleased with Dr Cleo's demands. The situation worsened when the Dental Practice received a letter from Revenue authorities claiming that they are owed P120,000 in tax. This happened because Dr Leo forgot to file tax returns.

REQUIRED

1. Discuss the advantage of a limited liability partnership over an ordinary partnership (8marks)

2. Advise whether or not Dr Leo is correct in demanding half the profits. (4marks)

3. Explain how a deed of partnership would have assisted C& L Dental Practice (8marks).