The partnership provides a superior solution to the agency problem, while permitting the concentration of capital. The addition of limited liability, similar to that used in many professional services organisations in the UK and USA, would provide a better overall model for small to medium enterprises than the limited liability company.
Critically evaluate this assertion in the context of prevailing corporations law and the law of partnership in Australia.
1. demonstrate a sound understanding of the regulation of business associations, in terms of the:
a. ways in which a business association may be brought into voluntary and involuntary legal relations with the outside world (?external relations?);
b. issues internal to the business association (?internal relations?), these being
(i) control and management of the business,
(ii) risk of loss of financial investment in the business and returns on such investment, and
(iii) duration of the investment;
c. public interest in business associations represented by the existence of statutory regulators, principally the Australian Securities and Investments Commission (?ASIC?), and the major policy interests those regulators serve; and
d. the sources of partnerships and corporations law, particularly the Partnership Act 1895 (WA) as amended, the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth).
2. critically analyse and evaluate the existing system for the regulation of business associations and consider possible avenues of reform;
3. apply legal research and problem solving skills to business association scenarios; and
4. demonstrate an appreciation of the role of a business lawyer and, in particular, of the ways in which a lawyer can responsibly make use of the law to advance the interests of the parties to cooperative business arrangements.