Lucy, Seamus and Koo are students who are keen to earn an income in their...
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Accounting
Lucy, Seamus and Koo are students who are keen to earn an income in their spare time to finance their studies. Lucy has a truck, Seamus owns a lawnmower and Koo has a computer. They print flyers advertising LuSeKo Mowing Service, their registered business name, which they drop in neighbourhood letterboxes. Within a short time they have a list of regular clients. Seamus cuts the grass, Lucy removes the clippings in her truck and Koo keeps the accounts. Seamus decides that they need an industrial ride-on mower and orders one from FastCut Mowers in the name of LuSeKo. Lucy and Koo were not consulted about this purchase. Meanwhile, Lucy develops a separate business relationship with many of LuSeKos clients by removing rubbish from their properties on weekends while Seamus and Koo are busy studying. These clients pay Lucy in cash which she deposits in her personal bank account. Lucy does not disclose these jobs to Seamus and Koo. When FastCuts bill arrives, Koo is particularly upset when she realises there is insufficient money in the accounts to pay for the ride-on mower. While operating the ride-on mower, Seamus hits a stump and is flung under the rotating blades and later dies as a result of his injuries. 1. Are Lucy, Seamus and Koo carrying on a partnership? 2. Assuming that Lucy, Seamus and Koo are in partnership would Lucy and Koo be liable to contribute to the purchase of the ride-on mower? 3. Is Lucy in breach of any partnership duties as a result of carrying out her weekend work?
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