CLA2601 Assignment 1 (COMPLETE ANSWERS) Semester 1 2025 (770912) - DUE 7 April 2025

CLA2601 Assignment
1 (COMPLETE
ANSWERS) Semester
1 2025 (770912) -
DUE 7 April 2025

, CLA2601 Assignment 1 (COMPLETE
ANSWERS) Semester 1 2025 (770912) - DUE 7
April 2025

Question 1 Zane, Bongi, Muthu and Sophy are
friends who decide to form a partnership to
purchase and sell new and secondhand mobile
phones. Sophy and Bongi will provide the capital to
purchase the initial stock for the partnership. Zane
will be responsible for the repair of mobile phones
and Muthu will be responsible for the day-to-day
activities regarding the sales, administration and
marketing of the mobile phone business. The
parties agree that the profit derived from the
partnership will be divided equally between Bongi,
Sophy and Zane, and that Muthu will receive a
monthly salary for his services. Discuss and explain
whether the above terms constitute a valid
partnership agreement. Refer to relevant case law
in your answer. 10 marks
Essential Elements of a Valid Partnership:

A valid partnership must meet four essential requirements, which are:



Each party must bring something into the partnership — whether it be
money, goods, or services.

The partnership must be carried on for the joint benefit of the parties.

The purpose must be to make a profit.

There must be an agreement to share in the profit.

Let’s assess the scenario using these elements:



1. Contribution of Each Party

Sophy and Bongi contribute capital.