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Business Law
A partnership is a legal, voluntary agreement between
two or more parties to carry on a business with the aim of profit. The
agreement between parties may be expressed in written form, or implied in oral
with the inclusions of the essentials and types of the partnership, kinds,
rights and duties of partners, dissolution of partnership, and the settlement
of accounts on dissolution. A general partnership has unlimited liability,
whereby all partners are liable for debts incurred by the partnership. When a partner’s
obligation is not met, partner’s personal assets may be used to satisfy the
debts of creditors.
As the partnership operates within West Malaysia, it
is a requirement to register under the Business Registration Act 1956. The
registration will be completed within 30 days from the 12th of November 2014,
the commencement date. The partnership name would be ‘MugPrint & DIB’.
Therefore, the PNA 42 form, the business name approval form for trade name must
be completed. The approval of business names is based on Rules 15, Rules of
Business Registration 1957. A registration fee of RM60/annum is required for
partnership using trade name.
The Business Registration Form (Form A) is completed
with the following information- the business name, commencement date of
business, type of business carried out and a copy of the Partnership Agreement.
The Registrar of Business requires documents such as photocopied version of
owner’s identity card, permit letter for the partnership and the approval from
relevant agency. Both partners have to sign the completed form and partners can
submit to any SSM counter, or via SSM E-Lodgement services application. Such
requirements are based on Section 5 of the Registration Of Business Act 1956.
The company, MugPrint, would obtain the capital
investment of RM100,000 from a bank loan.
The amount of RM80,000 is fully utilized for mug printing purposes,
while the remainder of RM20,000 is allocated for labor force expenses. As a mug
supplier to ‘DIB’, the allocated amount is used to purchase a mug design
printer from a reliable reseller that sells high quality machineries. Due to
limited capital, MugPrint will prioritize a one-time purchase of a durable
machine of reasonable price that has a warranty period. Operation of the machine
will be handled by manual labor, which is taken account in the allocated funds.
There are some terms that should be clarified to avoid
conflicts from arising. Firstly, the name
of the partnership agreement is “ MugPrint & DIB”. This partnership
shall be deemed to commence on the date of 12 November 2014. The terms include
clarification of contribution in cash, property or services between both
parties. MugPrint is formed to assist
DIB by supplying high quality mugs- the most demanded utensil in a coffee
outlet. DIB has to serve their customers
with the supplied mug and provide a monthly sales record on coffee and the mugs
to MugPrint. DIB is also required to display the mugs on the shelf where the
height is at eye level. The shelf has to be placed at an accessible place to allow
easy access of customers.
The distribution of profit is equal, with a ratio of
5:5, due to the objective of aiding DIB in the partnership. The declaration of
dividends between both parties is carried out at the end of each month.
However, MugPrint will have signature authority on the bank accounts. Monthly
meetings are required for decisions and amendments on the partnership to be
carried out. Any events/amendments related to the partnership has to be
discussed and agreed by both parties in order to be applicable. This is crucial
when the desire of additional partner arises.
However, the dissolution of partnership may occur due
to death, expulsion of partner or bankruptcy. Partners can execute a buy-sell
agreement to address the issue of transferability of their partnership interest
to allow continuity. A notice prior to the time of withdrawal has to be done 3
months in advance otherwise the termination of partnership is invalid.
I would employ less fortunate because manpower is still
required to operate machineries, mainly referring to the mug design printer.
Albeit being unfortunate, they are still capable of performing tasks like a
normal person. Therefore, the less fortunate should be given a chance of
employment. Moreover, researches and studies have shown that a less fortunate
person could communicate and socialize better in comparison to a normal person.
This could prevent the misunderstanding and conflict among workers from arising.
Lastly, providing employment to the less fortunate is a way of eliminating
discrimination within the society. Provision of employment to the less
fortunate is able to brighten their future, and further improving the country’s
economy as a whole.