Hassan, Ali and Riaz are partners in a commercial cleaning service called Alternate Inc. They contract with companies to provide cleaning and maintenance services to offices. Equipment is owned by Alternate Inc. and the cleaning staff is hired on contract basis. Work contracts are negotiated for 6 months of service. Hassan has majority share of 60% in the partnership and also owns the office where Alternate Inc. is based. Ali and Riaz have 20% share each.
They are currently considering dissolving the partnership after completing current assignments and are not taking any new contracts. Hassan has proposed to buy out the other two partners converting the business into a sole proprietorship.
During the performance of services at Telco Enterprises, a fault in one of the machines being used for cleaning led to a fire and damages at Telco Enterprises. After a month, Telco Enterprises sued Alternate Inc. for damages. By this time, the partnership had been dissolved and Alternate Inc. was now registered as a sole proprietorship.
In this scenario, who would be responsible for damages?
Discuss logically and justify your answer with proper argument.
Solution: Surely Alternate Inc is responsible for damages and they must paid for those damages. while partnership are not more continue. all partner must pay damages accordingly to their laibilities mention in partnership act at the time of forming Alternate Inc. Partnership is still during contract with customer service after completing that assignment which is in under process. the loss happened during the assignment not after completing the assignment therefore all partners are responsible to recover the damages for telco interprise.DOWNLOAD SOLUTION HERE