The law of partnerships has been around for at least a couple of
centuries, but there are still 'certain aspects of the law on
the formation of partnerships that could be usefully
clarified', in the words of Lady Justice Arden of the English
Court of Appeal: Ilott v Williams,  EWCA Civ 645.
Ilott and three others joined forces to market a new concept in
asset management. The four individuals needed some outside
expertise, so they entered into a deal under a side letter with the
general partner of BlueCrest, a limited partnership, under which
they would become limited partners of BlueCrest and share with it
the profits of the new venture. The business went well, but
disagreements arose and the original four proponents disagreed
about profit-sharing. Ilott argued that they were in partnership,
which gave him the right to a share of partnership profits from the
time they had joined forces.
But had they formed a partnership? The trial judge thought not.
On appeal, Ilott took the position that the partnership arose once
the parties agreed to establish the business, not from the later
point when they had actually done so. The other parties said that a
partnership was created only once the business was up and running
and had acquired property. Lady Justice Arden agreed: there was no
partnership until the business was actually operating. More is
required than a mere decision to carry on business, although
preparatory work can qualify to the extent that it is carried on
with a view to profit. Just creating PowerPoint slides and planning
pitch meetings was not enough on these facts, however. When the
parties first got together, they had a concept, but no means of
creating any profit and had made no financial commitment to the
venture apart from the acquisition of a domain name. They did not
purport to bind each other contractually and had not agreed on the
legal form their business was to take. They didn't even have
funding. Even if a partnership had come into existence, it would
have been dissolved by virtue of the agreement with BlueCrest
'for the simple reason that the business became that of the
BlueCrest organisation'. Ilott therefore had no claim against
his three business associates for a share in partnership profits.
He could still go after BlueCrest for his share of a contractual
right to profits under the side letter. A hitch there, though:
Ilott had been notified of his removal as a partner of BlueCrest,
which disentitled him to share in the profits of the business from
the point at which that became effective. 'Harsh results'
for Ilott, but there were no grounds to 'rewrite the agreement
to accord with what the court might think fair' -- or Ilott,
for that matter.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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