Nandutu wants to set up a bridal shop with Kylie and has a number of questions about how they should start trading. At 24, Kylie is much younger than Nandutu but has previous experience of running a bridal shop and is a good sales woman. The plan is to have her work full time in the shop while Nandutu will be the owner and manager and will deal with matters of premises, taxes, payrol and all other administrative issues. Nandutu has put aside UGX10,000,000(Ten million Ugandan shillings) as capital to start off the business. Kylie cannot afford to put any money into the business and in fact, Nandutu has learnt that Kylie is not prudent in financial management and may be deep in debt. Nandutu's key objectives in relation to the business is that :

. Is keen to start trading as soon as possible

. Does not deserve to engage Kylie as an employee.

. Does not desire to take responsibility for any of Kylie's debt.

(a). Explain why if Nandutu and Kylie started trading together in the Bridal shop, the business would be deemed a partnership.

(b). Advise Nandutu ( if she and Kylie trade together in partnership) whether the partnership would be liable if Kylie ordered wedding dresses from a supplier.

(c). Nandutu is contemplating picking a private limited liability company over the proposed partnership. (1.) Identify two advantages of trading as a limited company and explain why these are directly relevant to Nandutu's situation.(11) Draft a letter to Nandutu setting out her obligations to keep up to date records of the company and the filings that must be made annually.