Part 2Business organisations
144
1 Joseph David Soap wishes to set up in business
on his own as a carpenter, having acquired a small
business connection from John Smith. Which of the
following trading names, if any, would require Joe
to comply with the provisions of the Companies
Act 2006?
(a)David Soap;
(b)J D Soap & Co;
(c)Joe Soap;
(d)Joe Soap Carpentry (formerly John Smith’s);
(e)J D Soap;
(f )Chipaway;
(g)Dave Soap.
2 Your friend, Fred, intends to go into business on
his own as a timber merchant under the name of
‘County Council Supplies’. What could happen to
Fred if he does this?
3 Old John Brown has been in business as a furniture
remover in Barchester since 1975. Last year young
John Brown moved to Barchester and has started up
a furniture removal business in his own name. Can
old John Brown stop him?
4 Adam Smith, a grocer, comes to you for advice on
his finances. What advice would you give him in
terms of each of the following questions which he
asks you?
(a)‘Times have been very hard for me lately.
I owe so many people so much money. I could
probably pay my creditors, say, half of what I
owe them but no more. Is there a way of doing
this, given that I understand that a builder to
whom I owe £1,000 appears to have gone to
court to make me bankrupt?’
(b)‘Anyway, I have tried to make my family safe.
Last week I gave my wife the family home
and on the same day sold her two terraced
houses in Barchester worth £40,000 for £500.
Yesterday I also paid my brother off. I owed
him £1,000 from when I started up so he should
have it. My creditors can’t upset these deals,
I take it.’
(c)‘I have not paid John, my driver, for a month and
I doubt whether I can now. I wish I could have
helped him but I guess he will have to go down
with all the other creditors. That’s the position,
isn’t it?’
(d)‘Of course, even if they make me bankrupt I shall
rent another shop and go on trading. Nothing
can be done about that, can it?’5 Joe is a solicitor employed by Bloggs & Co. There
are two partners, Harry and Ian. Ian is intending to
retire and it has been decided that Joe should
replace Ian as a partner, with Harry carrying on
as a partner.
Explain to each of Joe, Harry and Ian what steps
each should take to protect himself as a result of the
changeover.6 Cliff has been asked by his friends, Don and Eric,
to help them set up an antiques business. Don and
Eric want Cliff to lend them £5,000 and they say they
will give Cliff one-third of the profits instead
of interest on the loan.
What are the dangers to Cliff in such an
arrangement and how can he overcome them?7 Fred is a new partner in Gee & Co, a firm of interior
designers. In discussion at a recent meeting of the
partners Fred was told that the office building at
which the firm is based is not partnership property.
Explain to Fred:
(a)what is meant by the expression ‘partnership
property’;
(b)what effect it will have on him if the office
building is not partnership property;
(c)how it can be that an asset which is used in
the firm’s business is not in fact partnership
property.Self-test questions/activities