KOLEJ PROFESIONAL MARA BANDAR PENAWAR

DIPLOMA IN ACCOUNTING

COURSE NAME : INTRODUCTION TO PARTNERSHIP & COMPANY LAW

COURSE CODE : LAW 2053
ACADEMIC SESSION : 2, 2022
TYPE OF ASSESSMENT : ASSIGNMENT
DURATION : 6 – 30 SEPTEMBER 2022

CLO2: Demonstrate effective communication in explaining the relationship of

partners, liabilities and dissolution according to Partnership Act 1961 (A3, PLO5)

Personal Details Section /

Marks
1) MUHAMMAD ADHAM Question No.
WAFIQ BIN ZULKIFLI 1
2) NUR FATIHAH BINTI
BORHAN 2
Name
3) NURUL SYAZWANI
BINTI MD. MUNAWAR Total / 40
4) NUR SAFIRA ALEYA
BINTI AB RAHMAD
1) PDA-2107-126
2) PDA-2107-131
I/D Number
3) PDA-2107-062
4) PDA2107-112
Class DIA 4A
ADAM MUHAMMAD IHSAN
Lecturer
BIN MOHD SHANI
QUESTION 1: What action that he could take against Iman.

Issue:

The issue is whether Adam could take action against Iman who opened another
carwash which is have the same nature with their partnership business,
BengkangBengkok Entreprise

Law:

In the Section 32 Partnership Agreement 1961 said that a partner who runs a private
business will be liable to account for the profits that he made if the business is of the
same nature with the partnership business and the private business competes with
the partnership business and the competing business is carried on without consent of
the other partners.

In the Aas v Benham case, Benham worked as a partner for a ship brokerage. A
shipbuilding business had also asked him for help. He received information while
acting for the firm suggesting that it could be reconstituted as a builder of warships.
He gained money for himself by using that information to assist in creating a
prospectus for the reconstruction of the shipbuilding business. owing to the
rebuilding. Mr. Benham had no obligation to answer to his business partners.
Building ships or providing corporate restructuring advice were not part of the firm's
core competencies. Even though Mr. Benham had learned of the information while
conducting business for the company, Mr. Benham was not liable to account to his
partners, which barred him from using the knowledge as he did. The court held that
a partner in a partnership business of selling and buying properties from another
company may buy the properties for himself from that same company. Such
purchase was held not in competition with the partnership business.

Application:

Based on the above law, Adam can take action to claim every profit that obtained by
Iman because Iman opened another carwash which having the same nature of
partnership business. Iman must be liable to account for profit he made from private
 business. In other word, Iman should declare the existence of the private business
and all the profit must be share with other partner.

If Iman want to run a private business, he must avoid running the business which
have the same nature with the partnership business. So, Iman does not need to
share or give the profit from private business to partnership business.

Conclusion

For the conclusion, Adam can take action against Iman by claim the profit because
Iman opened another carwash which having the same nature of their partnership
which is BengkangBengkok Entreprise.
QUESTION 2: Any possible ground to dissolve the partnership due to Ezzra’s act.

Issue:

The issue is whether Adam can dissolve the partnership due to Ezzra’s act which is
take client’s money for her personal purpose. Therefore, the client began to protest
and lost trust in their enterprise.

Law:

Regarding to the Partnership Act 1961, there are two categories of dissolution of
partnership which is dissolution without of court and dissolution with order of court.
In this case, It is can dissolve with order of court.

In Section 37(c) Partnership Act 1961 state when a partner commits a prejudicial
conduct that affects the partnership business, any other partner may apply to
dissolve the partnership business. Based on the statement, we can know that any
partner can apply to dissolve the partnership business if one of the partners has
done something that may affect the partnership business in terms of tarnishing
reputation or causing financial loss may be regarded as prejudicial conducts. If the
conduct is simply bad behavior but is not directly or indirectly related to the
partnership business, then the court may not consider application to dissolve the
partnership.

Regarding the case of Essel v Hayward, the court held that a solicitor who was
entrusted with a client’s money had used it for his own personal needs. The court
held that such behavior is considered as prejudicial conduct because it affects the
credibility of the firm.
Application:

Based on the above law, Ezzra’s act can be a reason to dissolve the partnership
business related to dissolution on ground of prejudicial conduct to the business. This
case arises when Ezzra not satisfied with the profits that she obtained from the
partnership business. Finally, she started to take client’s money for her personal
purpose. Because of that, the partnership begins to lose clients, and in an effort to
offset their losses, they begin to take out fresh loans from SukaDuit Bank. The
partnership fails to make the repayment of their loan to the creditor.

If Ezzra does not take client’s money for personal purpose or the behavior is merely
inappropriate and not related to the partnership business either directly or indirectly,
Adam as her partner can’t apply to the court for the dissolution of partnership
business.

Conclusion

For the conclusion, Adam can dissolve the partnership under dissolution by order of
court on grounds of prejudicial conduct to the business or grounds of persistent
breaches of partnership agreement or grounds of carrying on business at loss.

In a broad sense, from the entire discussion, it is proven that Ezzra have incurred
some liability or have done some wrongdoing. Adam's plan to end the relationship is
a smart one because there is a lot of problem going on and it could have a major
effect on the business as well.
REFERENCES

1. Suijuris, H. (2017). Partnership.pdf. The Academia Team.

https://www.academia.edu/34823876/Partnership_pdf