Sarah graduated earlier this year and began working at an accounting business called Online and Face...

  

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Sarah graduated earlier this year and began working at an accounting business called "Online and Face to Face Accounting". The accounting business was founded in 2018 by Michael and Tom and has been carried on continuously since then. It has been very successful and taken on 8 new joint owners since the business started, bringing the total number of joint owners to 10 at present. All the joint owners have agreed that net profits of the business would be shared equally, and that business policy matters are to be agreed and any differences resolved through mediation. Sarah is paid a salary of $55,000 per year. This is a fixed salary that does not change according to the profit made by the "Online and Face to Face Accounting" business. Since she began working at the accounting business, Sarah has been very diligent and committed. She has quickly become more involved with different aspects of the accounting business, especially with the business' online clients. Everyone has noticed her work ethic and commitment to the job and she has already been voted "Star employee of the month" on three occasions. This has caused one of the founders of the accounting business, Michael, to allow Sarah to work closely with him on major client engagements. In early June, Michael had an important meeting with a potential new client, Creative Ads Pty Ltd. The managing director of Creative Ads Pty Ltd is Emily. Michael attended the meeting with Sarah and he introduced her as a "partner". Sarah was a little surprised at being called this but saw it as nothing more than a sign of respect from Michael. 1) Is the business structure of "Online and Face to Face Accounting" a partnership and is Sarah a partner of the partnership? Use the Partnership Act and any relevant case law to support your argument and conclusion. (10 marks) The meeting with Emily of Creative Ads Pty Ltd went very well and the company has become a new client of "Online and Face to Face Accounting". Michael was able to achieve this at the meeting in part by agreeing to use Creative Ads Pty Ltd for some advertising for "Online and Face to Face Accounting". Soon after the meeting, Michael signed an advertising contract for $20,000 on behalf of "Online and Face to Face Accounting". A couple of weeks later, the advertisements were provided to Michael who was very happy with them. An invoice was enclosed that he gave to Tom's personal assistant staff so that it could be arranged for Tom to make the payment. The invoice was due to be paid on 30 June by electronic funds transfer but payment was not made by then. On 7 July, Emily phoned "Online and Face to Face Accounting" but could not get hold of Michael. However, she spoke to Tom and asked for immediate payment of the invoice. Tom had been very busy and undertook to get back to Emily. It was only then that Tom looked at the advertisements and was unhappy with them. He phoned Emily and stated that he never requested the advertisements and that, even if he did, they were not suitable and so he refused to pay the invoice. Sarah graduated earlier this year and began working at an accounting business called "Online and Face to Face Accounting". The accounting business was founded in 2018 by Michael and Tom and has been carried on continuously since then. It has been very successful and taken on 8 new joint owners since the business started, bringing the total number of joint owners to 10 at present. All the joint owners have agreed that net profits of the business would be shared equally, and that business policy matters are to be agreed and any differences resolved through mediation. Sarah is paid a salary of $55,000 per year. This is a fixed salary that does not change according to the profit made by the "Online and Face to Face Accounting" business. Since she began working at the accounting business, Sarah has been very diligent and committed. She has quickly become more involved with different aspects of the accounting business, especially with the business' online clients. Everyone has noticed her work ethic and commitment to the job and she has already been voted "Star employee of the month" on three occasions. This has caused one of the founders of the accounting business, Michael, to allow Sarah to work closely with him on major client engagements. In early June, Michael had an important meeting with a potential new client, Creative Ads Pty Ltd. The managing director of Creative Ads Pty Ltd is Emily. Michael attended the meeting with Sarah and he introduced her as a "partner". Sarah was a little surprised at being called this but saw it as nothing more than a sign of respect from Michael. 1) Is the business structure of "Online and Face to Face Accounting" a partnership and is Sarah a partner of the partnership? Use the Partnership Act and any relevant case law to support your argument and conclusion. (10 marks) The meeting with Emily of Creative Ads Pty Ltd went very well and the company has become a new client of "Online and Face to Face Accounting". Michael was able to achieve this at the meeting in part by agreeing to use Creative Ads Pty Ltd for some advertising for "Online and Face to Face Accounting". Soon after the meeting, Michael signed an advertising contract for $20,000 on behalf of "Online and Face to Face Accounting". A couple of weeks later, the advertisements were provided to Michael who was very happy with them. An invoice was enclosed that he gave to Tom's personal assistant staff so that it could be arranged for Tom to make the payment. The invoice was due to be paid on 30 June by electronic funds transfer but payment was not made by then. On 7 July, Emily phoned "Online and Face to Face Accounting" but could not get hold of Michael. However, she spoke to Tom and asked for immediate payment of the invoice. Tom had been very busy and undertook to get back to Emily. It was only then that Tom looked at the advertisements and was unhappy with them. He phoned Emily and stated that he never requested the advertisements and that, even if he did, they were not suitable and so he refused to pay the invoice.

Answer rating: 100% (QA)

Answer According to given data according to the data Ans No Sa... View the full answer