Chapter 9: Law of Partnership

A partnership is a voluntary association of two or more persons, who contribute, money, property, time, care or skill, a lawful business for profit and to share the profits and losses of the business.

Essential Of Partnership

·      

      Agreements                                                                                               

- 

    results of an agreement between person who want to form a partnership.

·     

             Number of Partners                                                                                          

     - a partnership consisting of more than 20 persons for carrying on any business is illegal.

·        

    Existence of Business                                                                     - the partners must agree to carry on a business

·     

               Sharing of Profits                                                                                            - the agreement between the parties must be to share the profits of a business

·       

     Duration                                                                                                      - the partnership continues at the will of the partners.

Kind of Partners

      

      1)  Active Partner

     

      2) Sleeping Partner

      

      3)Norminal Partner

      

      4) Senior Partner

      

      5)  Junior Partner

     

      6) Partner in profit only

 Types of Partners

     

    1) Partnership at will: where no provision is made in the contract regarding       the duration of partnership.

      

     2)  Particular partnership: where partnership is formed to do a particular             business. Such partnership is dissolved immediately after the completion     of that business.

Rights Of Partners

    

     *   Right to take part in business

    

     *   Right to inspect books.

    

     * Right to share profits.

    

     *  Right to give consent.

    

    *  Right to retire: a partner can retire with the consent of other partners

Duties of partnership

·      

    Duty to carry on Business:                                                            -- it is the duty of every partner to carry on the business of the firm for the common advantage.

·     

            Duty to be just and faithful:                                                       - the partners should be faithful and just towards the firm

Duty to indemnify:                                                                       -every partner is bound to indemnify the firm for any loss

Dissolution of partnership  

1)  A firm may be dissolved with the consent of the partners.

2)  A firm is compulsorily dissolved if all the partners except one, become insolvent

3)  If a firm is constituted for a certain term, then it stands dissolved after the expiry of the term.   

Chapter 8: Company Law

Definition :Corporate law (also "company" or "corporations" law) is the study of how                           shareholders, directors, employees, creditors, and other stakeholders such as                        consumers, the community and the environment interact with one                                            another.Corporate law is a part of a broader companies law 

                   (or law of business associations)

Type of Business Organization

COMPANY LAW IN MALAYSIA

*  The Companies Act 1965 and the Companies regulations 1966 form the core in the regulation of companies in Malaysia.

  * The Act is modeled on the English Companies Act 1948 and the Australian Uniform               Companies Act 1961.

PROCEDURE FOR INCORPORATION

*Pre-incorporation steps

1. Reservation of names :-apply for the company name and reserved it. [s.22(6)]

2. Documentation-among documents to be lodged with the Registrar.

3.fees:- must be paid when document is lodged with ROC.

EFFECT OF INCORPORATION

*S 16(5) – provides that on and from the date  of incorporation 

specified in the certificate of incorporation, the subscribers of 

the memorandum, together with such other persons as from time 

to time become members of the company, are a a body corporate 

by the name set out in the memorandum.

*i.e: after the necessary steps leading to incorporation have been 

taken and a certificate of incorporation has been issued by the 

Registrar, a new legal entity is created.

 Chapter 7: Law of Agency

Definition:

The law of agency is an area of commercial law dealing with a set of contractual, quasi-contractual and non-contractual fiduciary relationships that involve a person, called the agent, that is authorized to act on behalf of another (called the principal) to create legal relations with a third party.

the relationship of agency.
  

agents and principals:(internal relationship), known as the principal -agent relationship.

     agent and the third parties: with whom they deal on their principals'                                         behalf(external relationship.

     principals and third parties: when the agents purport to deal on their behalf. 

Type of Agency.

 general agency: authorized to conduct a series of transactions involving a continuity of service.

special agency: authority is limited to accomplishing a specific, and limited assignment.

Duties of an Agent

-Loyalty : must act at all times solely in the best interests of his or her principal to the exclusion of all other interests.

-obedience: obliged to obey promptly and efficiently all lawful instructions of his or her principal, within the scope of the agency.

-Disclosure:An agent is obligated to disclose to her or his principal all relevant and material information(unless obtained through another fiduciary relationship) that the agent knows and that pertains to the scope of the agency.

-Confidentiality:An agent is obligated to safeguard his or her principal’s confidence and secrets.

   The duty confidentiality continues forever.

-Reasonable care and Due Diligence:obligated to use reasonable care and diligence in pursuing the principal’s affairs.

-Accountability:obligated to account for all money or property belonging to the principal, which entrusted to the agent.

Rights of the Agent

*To payment

*Exists only where the agency agreement indicates such an intention.

*If the agency is gratuitous no payment is intended.

*If the agency is contractual, the agent may sue for breach if the principal fails to make appropriate payment.

 *To indemnity

*Whether the agency is gratuitous or contractual an agent is entitled to recover any expenses incurred or losses suffered.

 

Chapter 6: Employment Contract

sample employment contract

type of employment contract

 Definition of Employment

• Employment means work or service performed by an individual to the task at hand for another person or entity in exchange for wages or other remuneration.

Employment Law In Malaysia:

• regulates the operation of the labour market 
• regulates employment relationship between employers and employees in particular.

            Pension Act 1980.

:- for the administrative pensions , gratitude for public servant and dependents.

          

         Employee Social Security Act 1980

:- for social protection to all employers as well employer.

:- example : Social Security Organization(SOCSO), or Pertubuhan Keselamatan Social(PERKESO) Malaysia.

         Employees Provident Fund Act 1951

:-  for the provision of financial security for its member after retirement.

:- for example. Employee Provident Fund (EPF). Kumpulan Wang Simpanan Nasional (KWSP).

          Industrial Relations Act 1967

:- An Act which governs the relationship between employers and workmen or employees and their trade unions and generally deal with trade disputes.

:- for example, Industrial Relations Department or Jabatan Perhubungan Perusahaan, Malaysia.

         Wages Council Act 1947

:- This Act is administered by the Department Of Labour or Jabatan Buruh.

HIRING

1.  A person who is working under contract is employee.
2. in Peninsular  Malaysia, the act is Employment Act 1955.
3. In Sabah, Labour Ordinance Sabah( Cap 67.)
4. In Sarawak, Sarawak Labour Ordinance (Cap. 76).
5. A job interview will be conducted to choose right person with good skills and wide knowledge.

FIRING

1.  firing is happens when, employer dismiss the employee after contract of service is considered broken. or when an employee is absent from work for more than 2 consecutive working days without prior leave from the employer or without informing or attempting to inform the employer at the earliest opportunity during such absence with reasonable excuse .
2. An employee has the right to terminate the contract of service, where an employer fails to pay wages within seven days after the wages period.

       3.A contract of service can also be terminated without notice :

       4.By paying to the other party or indemnity in lieu of notice

       5.if there is a willful breach by the other party of a term or condition of the contract of service

      6.Where the contract of service has expired or work being completed, the contract may also be terminated. Written notice being given by either party may also terminates a contract of service.

 SEXUAL HARASSMENT

Definition: any unwelcome verbal, non-verbal, visual, psychological or physical conduct of a            sexual nature that might, on reasonable grounds, be perceived by the victim as placing a      condition of a sexual nature on his or her employment because of his or her sex.

DISPUTES

:-A dispute being referred to as trade dispute under the Industrial Relations Act 1967 means any disagreement between the employer and workman or employee which is connected with the employment or non-employment or the terms of employment or the conditions of work of such workman or employee leading to industrial action.

:- The Industrial Relations Act 1967 governs the relationship between employers and workmen or employees and their trade unions and generally deals with trade disputes.

PENSION

Pension means money paid under given

conditions to a person following retirement or

to surviving dependents.

 

Chapter 5: hire purchase

Warranties and Conditions

• „ There are certain terms, which are implied in a hire-purchase agreement, these terms may be warranties or conditions.

„

•        The basic difference between of warranty and a breach of condition is as follows:

„

•       A breach of condition is a serious breach and it goes to the “root of the contract” thus entitling the party not in breach to repudiate the contract and sue for damages

     

•           A breach of warranty is a less serious breach and it does not entitle the party not in breach to repudiate the contract but to sue for damages only

Liability of Owner and Dealer for Misrepresentation

• „If the owner made a misrepresentation in the course of negotiations leading to the hire-purchase agreement, the hirer has the right to rescind the agreement and sue for damages, section 8(1)(a), Hire-Purchase Act.

• „It is common for hirers to obtain goods from dealers who are not financial institutions.

„

• In such cases, the dealer “sells” the goods to the finance company, which will in turn enter into a hire-purchase agreement.

• „In event that the dealer has made a misrepresentation, the hirer cannot repudiate the agreement.

• „He can only sue for damages, section 8(1)(b), Hire-Purchase Act.

Statutory rights of Hires

„Section to 15 of the Hire-Purchase Act provide for the rights of hirers. The hirer has the following rights:

„

To be supplied documents and information, section 9, Hire-Purchase Act.

„To require the owner to appropriate payments made in hire purchase agreements, section 10, Hire-Purchase Act.

„To assign his right , title and interest under the hire-purchase agreement, section 12, Hire-Purchase Act.

To have his right, title and interest passed on by operation of law, section 13, Hire-Purchase Act.

To complete the purchase of the goods earlier than due date, section 14, Hire-Purchase Act.

„To terminate the hiring, section 15, Hire-Purchase Act.

„To apply to the Magistrate’s Court for an order approving the removal of the goods to another place, section 11, Hire-Purchase Act.

Repossession by Owner

„At common, the owner has the right to recover possession of the goods if the hirer commits a breach of his obligations under the hire-purchase agreement.

The hire-purchase act lays down various restrictions on the power of the owner as means of protecting the hirer, section 16 to 19.

The restrictions are as follows:

     Notice must be given to the hirer when goods are to be repossessed, section 16.

After possession the owner must not sell or dispose of the goods for twenty one days, section 17.

Hire’s rights and immunities when goods are repossessed, section 18.

Hirer can regain possession of the goods in certain circumstances, section 19.

Insurance

An owner shall cause to be insured in the name of the hirer against any risks he think fit in respect of the following:

Motor vehicles comprised in a hire-purchase agreement, for the first year only.

All other goods comprised in a hire-purchase agreement, for the duration of time that the goods remain under hire-purchase, section 26(1), Hire-Purchase Act, 1967.

Fraudulent Sale of Goods by hirer

„If the hirer fraudulently disposes of or sells any goods comprised in a hire

purchase agreement or attempts to defraud the owner by such means, he will

guilty of an offence.

„

Punishable on conviction to a fine up to RM10 000 or imprisonment for a term

not exceeding three years or both, section 38, Hire-Purchase Act.

finally,

„Hire Purchase is a system of acquiring goods on credit whereby the seller of the goods is regarded as the dealer, the purchaser is regarded as the hirer and the finance company as the owner.

„The ownership of the goods bought on hire purchase does not pass to the hirer at the time of the hire purchase agreement or upon delivery of the goods.