Law of Business Association

LST 2 LBA: Law of Business Association 
Semester 2 2016 
Submission requirements: 
1. This assignment counts for 50% of your final marks in this subject. 
2. An essay submitted after the due date without an extension having been granted attracts a penalty of 5% per day (or part thereof) of the marks available for the task. No marks will be given for an essay submitted after any response to this assignment has been marked and returned to any member of the class. 
3. The Subject Learning Guide sets out the policy on the granting of extensions. Please note that if you are unable to submit your essay by the due date you should consult your tutor beforehand to see if there are grounds for an extension. Extensions will only be given for very good reasons, normally only medical grounds or other serious interruptions in your ability to work. They are not granted for reasons that should be dealt with by a better organisation of your time and work practices. Nor are they given for reasons that were reasonably foreseeable at the time of enrolling in the subject. 
4. The total assignment word limit is 1500 words. Further, your answer for each of the two questions should be no more than 750 words. This is an over-estimate of the number of words necessary for a perfect answer. Responses of more than 1500 words in total may be penalised by the deduction of up to one half of one of the marks awarded for every 100 words by which the response exceeds the limit. There will be no reward given for short answers, other than the good will of the marker. 
5. Attention to presentation, expression, and the correct citation of cases, statutes and secondary sources will be rewarded. Use a recognised and consistent referencing style. Do not include a bibliography. 
6. Plagiarism will be heavily penalised. Plagiarism is defined and discussed in the Academic Misconduct Policy available on the LMS. 
7. Assignments are to be submitted on-line via Turnitin on the LMS. 
8. Ensure your name and student number is clearly visible on your assignment. Please also provide your tutor’s name on the assignment. 
9. Keep a copy of your work for your records. 

Assignment Question 
Students must attempt BOTH Questions. 
Question 1: (13 Marks) 
Rohit, Ariel, Charn and Levi are La Trobe students. They think they have stumbled upon a fantastic business idea. They have designed a smartphone app which gives people basic medical advice to help them diagnose their illnesses. Customers who pay for the premium version of the app also receive step-by-step instructions on how to carry out minor surgery on themselves. 
Their intention is to start small, but they hope the app will prove a huge worldwide success. None of them has much money, although Charn’s father (an illegal drug dealer with a long criminal history) is a very rich and is prepared to invest most of the money they need to get the business started. 
Rohit is studying software engineering and developed the software for the app. Ariel is a nursing student and supplied the medical information for the app. Her biggest concern is making sure the risks involved in doing business are minimized. Charn describes himself as a “risk-taker and entrepreneur – just like my dad”. He is an accounting student. He intends to take care of the business side of things. None of the others really like him, but figure they can put up with him. Levi is doing a law degree and says he will deal with any legal issues. 
Give Rohit, Ariel, Charn and Levi advice on what is the most appropriate business structure for their proposed business. 
Question 2: (12 Marks) 
Assume the business was set up as a Victorian partnership. Unfortunately, there are some problems: 
(a) Apparently, selling a product that encourages people to do their own surgery is illegal. The police are investigating and criminal charges are likely. In addition, a number of customers who injured themselves are suing the business for negligence. Rohit, Arial and Charn had asked Levi to look into the legal issues before they started the business, but Levi told them there was no legal problem with running this type of business. 
(b) Rohit has built into the app a mechanism that automatically diverts one half of the sales revenue to him personally. He claims this is fair because the app belongs to him anyway; and 
(c) Charn’s father is demanding access to the business records and accounts and is complaining about not getting a say in the way the business in being run. 
Give the partnership legal advice on each of the problems.

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