Business Law

Business Law
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Business Law
The Smith family business is an unlimited partnership. This means that the partners share the profits and the problems of the business. They are all equity partners who also share the liabilities of the business. According to Section 1 of the Partnership Act 1890, partners must be in a business with the view of acquiring profits (Sarah & Vida, 2020). However, the rule does not specify the sharing conditions of the profits. The current disruptions have reduced profits, and therefore the business needs money employing a loan to revive. The liability of the partners in this business is unlimited. Therefore, if the business begins to fall or is indebted, every equity partner is liable to pay the debt with a right to ask the other partners to contribute.
The bank manager is asking the Smith family to reorganize their business and control it is wrong. This is because the two parties should agree before deciding to change the business structure. Allowing the bank to control their business may lead to low profits and a lack of control of their funds. If the business bec...