MGT393H5 Study Guide - Limited Liability, Luke Bryan, Business Plan

127 views3 pages
Published on 10 Dec 2013
School
Department
Course
Page 1 of 3
FALL 2013
RSM 225/MGT 393 ASSIGNMENT #1 GENERAL GUIDE value 5%;
General guide only. This is not intended to be a sample response nor a complete guide but rather is intended to
reflect the type of issues that should be included into the response. This guide does not have “depth” of analysis
required - - only general concepts. [NOT PROOFREAD]
(given that the total page limit is 6 and part B has a max of 2 marks could be allocated Part A out of 67; Part B out of 33.)
Hunter Hayees, is a creative and wealthy businessperson. Keith Urbane does not have much by way of assets but is
highly skilled as a tailor particularly when it comes to leather related products. Carrie Underwoode is a super
salesperson “with an eye for style”. The three individuals are in their twenties and they all knew each other from back in
grade school and high school having remained close friends. All three grew up and continue to live in London, Ontario.
The three decided to open up a retail store with a Country and Western “spin”. Within the store, each would “do their own
thing”. Hunter would focus on importing high end men’s country sportswear, as that is where he had expertise. Carrie
would focus more on young women’s jeans and tops and Keith would make and sell custom-made leather cowboy
boots. (info have they formed a partnership? All elements are retail (similar); “do their own thing” suggests not a
collective venture (although could just be figure of speech)
Hunter negotiated a five-year lease at a new mall that opened in Milton, Ontario. The lease is a gross lease with an
annual rent of $120,000 per year. As Keith and Carrie are always worried about money, and never seemed to have that
much, Hunter thought he would not raise their stress levels and so told them that the lease was “monthly” and could be
terminated at any time with two months notice. This was not the case. (will be important is the tenant Hunter alone; or if
a partnership did Hunter act as an agent (binding the firm); will have a significant impact on who may have liability and the
ability to collect damages. There is a difference between binding the firm and binding each partner if they are in a
partnership. The basis of the firm’s liability is the fact that every one of its partners is an agent of the firm whose action
binds the firm, but the basis of the joint and several liabilities of the partners is due to the nature of unlimited liability. Thus,
subject to other specific factors, such as H taking on the business himself without the other two persons, the lease does
not bind any individual partner to pay but rather the legal liability of the firm creates a joint and several obligation for them
to pay.
6. Every partner is an agent of the firm and of the other partners for the purpose of the business of the partnership, and the acts of
every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he or she is a
member, bind the firm and the other partners unless the partner so acting has in fact no authority to act for the firm in the particular
matter and the person with whom the partner is dealing either knows that the partner has no authority, or does not know or believe him
or her to be a partner. R.S.O. 1990, c. P.5, s. 6.
May also be relevant as to how Hunter described the venture to OLI.
If it was a partnership - -Hunter was not honest in his dealings with Keith and Carrie. If it was a partnership this may not
impact the joint and several liability of the three of them but it may allow Keith and Carrie to make a claim as against
Hunter. There is a fiduciary duty on each partner to render account and to act in good faith toward other partners. Here,
not disclosing matters that affect the partnership, i.e. the terms of the lease, is a breach of such duty and will entitled the
other partners to claim against H for his breach.
When the store opened, a sign was erected out front that said UUH Country”.
would be useful to know if this name
was registered as a business style on behalf of a partnership; sole proprietorship: may help to determine nature of
relationship/entity. Note that the name consists of their three initials which might be more indicative of a collective
venture.
The store was located in the lower level of the new mall and consequently sales were slow as there was not that much
customer traffic. After a long hot summer, Keith decided to pursue his country music interest and one day did not show
up the store. Instead he sent a note to Hunter that said, “I have left to go to Nashville to pursue my dreams. Here is a
cheque for two months rent - $6666 close it down. Good luck” Without Keith being present, Carrie said, I am leaving
too.”. Was this a termination of the partnership? OR perhaps the three had some form of “association” and Keith was
just advising he was leaving.
Hunter tried to run the store for a few more months but the business model did not work. One day he moved out the
extra inventory, locked the doors and left the keys behind on the store counter. Would the fact that Hunter continued to
operate suggest that he saw this as his venture? OR sole proprietorship; If it was a partnership if it was in fact
terminated the fact that Hunter operated from this location for a few more months would that have an impact on
Unlock document

This preview shows page 1 of the document.
Unlock all 3 pages and 3 million more documents.

Already have an account? Log in

Document Summary

Rsm 225/mgt 393 assignment #1 general guide value 5%; This is not intended to be a sample response nor a complete guide but rather is intended to reflect the type of issues that should be included into the response. This guide does not have depth of analysis required - - only general concepts. [not proofread] (given that the total page limit is 6 and part b has a max of 2 marks could be allocated part a out of 67; part b out of 33. ) Hunter hayees, is a creative and wealthy businessperson. Keith urbane does not have much by way of assets but is highly skilled as a tailor particularly when it comes to leather related products. Carrie underwoode is a super salesperson with an eye for style . The three individuals are in their twenties and they all knew each other from back in grade school and high school having remained close friends.

Get OneClass Grade+

Unlimited access to all notes and study guides.

YearlyMost Popular
75% OFF
$9.98/m
Monthly
$39.98/m
Single doc
$39.98

or

You will be charged $119.76 upfront and auto renewed at the end of each cycle. You may cancel anytime under Payment Settings. For more information, see our Terms and Privacy.
Payments are encrypted using 256-bit SSL. Powered by Stripe.