Question 1 (a) Albert was invited by his friend, Benny, to set up a trading business in the form of partnership Benny planned to contribute 60% of the capital and Albert shall contribute the remaining 40%. How shall they share the profits and losses in the absence of any partnership agreement? (4 marks) (b) Candy set up a partnership business with David. One day, Candy made a contract with Cooltea Lid. in the ordinary course of business. Cooltea Ltd. knew that Candy is a partner of the business. Because of her busy schedule, Candy forgot to tell David about the contract. Since Candy wrongly estimated the expense, the partnership business suffered a loss of S1 million from the contract. David did not want to bear any loss arising from the contract which he did not know before signing. He thought that the loss should be borne only by Candy herself because she signed the contract. (1) (ii) Discuss whether Candy has breached her duties as a partner to David. (6 marks) Advise David whether he would be liable for the S1 million loss from the contract (10 marks) (Total 20 marks) Question 2 Neighbourhood Company Limited ("the Company") is a private company selling fashion. It has three directors, namely, Alan, Billy and Charles. They are holding 40%, 30% and 30% of the Company's shares respectively, Charles signed a contract on behalf of the Company with his girlfriend, Diana, a famous artist, for promoting the Company's image and products. Alan and Billy knew that the contract was signed, but they did not know the relationship between Charles and Diana (a) (b) Advise Charles whether he has breached any duties of a director on signing the contract. (10 marks) Advise Alan and Billy whether they could remove Charles from the office as a director. (10 marks) (Total 20 marks) Page 3 of 5