General Instructions

Read HRS Chapters 3 & 4 and answer the following questions using the IRAC method for problem-solving provided in Chapter 2 at [2-400].

I = Issue: Decide from the facts what the major issues are. It will help to break the facts down by identifying the main parties, then asking what their relationships are, what transactions have been entered into, and what events have occurred.

R = Rule of law: With your knowledge of the Corporations Act, case law containing company rules and other sources of company law, you need to make a decision about which legal rule or rules are relevant to the facts before you. Having identified the right rule or legal principle, you need to state it clearly and say where it comes from.

A = Application to the facts: You will then need to apply the law to the facts

C = Conclusion: You should come to a conclusion based on your argument.

1. SAFPL consolidated the farm business in 1981. Until then, some of the business had been operated by Michael Henry and Alexander Boyle, his brother-in-law, as a partnership.

a. What are some of the key differences between a partnership and a company, as a vehicle for operating a business?

b. At this stage in the development of SAFPL, what are the main distinguishing feature of incorporation for Michael and Alexander?

See [4-130], [4-220], [4-240], [4-260], [4-340] & s45A of the Corporations Act.

Answer re (a) & (b)

Issue:

Rule: What is a company? What is a partnership? Define with reference to their key features.

Application: Weigh up these characteristics and advantages and disadvantages with respect to SAFPL. Consider, in particular, what size of proprietary company it is right now (see s45A).

Conclusion