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FORMS LTD V.
MACINTOSH
facts
DBFL
(Data)
ON
Credit
Line
Similar
No Express
Notice
Pakfold
NS
Registered
MacIntos
h
Business
Systems
Credit
Line
Dist: Appl
No Express
Notice
MacIntosh
Bus Sys.
Sole Prop:
(A division
of Maritime
Business
forms Lt
MacIntos
h
Business
Systems
Division
Maritime
Bus Forms
Ltd.
Cheque
Payee:
Data/Pakfold
Payer: Maritime
As we know that sole proprietorship is an legal entity with
one owner and carriers unlimited personal liabilities
Reg: July 22,
1982
Time of
Events
Timeline of events
issues
Issue # 1
Did the defendant, Glenn
Macintosh, contract for the
purpose of goods and
services in the amount
agreed upon, in his
personal capacity or as
agent for Maritime
business forms limited?
Issue # 2
If the plaintiffs are
successful are they
entitled to interest in what
amount?
Sole proprietorship
&
Corporation
Sole Proprietorship
The simplest form of a business is a sole proprietorship. One
person performs all the functions required for the successful
operation of the business and assumes all the liabilities.
Corporation
A corporation is a legal entity that is separate and distinct from
its owners. Corporations enjoy most of the rights and
responsibilities that an individual possesses; that is, a
corporation has the right to enter into contracts, loan and
borrow money, sue and be sued, hire employees, own assets
and pay taxes. It is often referred to as a "legal person."
Precedent
Trail Tire Service Ltd. v. Scobie
In
order
to
claim
limited
liability
protection, the party must give ample
notice to suppliers of the change in status
particularly where the new business is
carried on in the same premises and the
former name is used.
There must be no doubt left in the minds of
the supplier that what is being done is as
agents and officers of the new corporation
Application
Glen
MacIntos
h
Precedent
Gelhorn Motors Ltd. v. Yee and
Wilcox
the mere giving and acceptance of
cheques should not have led to an
inference that the corporation had
become the debtor in place of the
defendants.
Application
Over the course of 1980 to 1981, cheques
made to both Data and Pakfold were
imprinted with the name Maritime
Business Forms Ltd..
According to the case law shown above,
the manner in which the cheques were
provided would not be sufficient evidence
as to whom the actual debtor of that
account was.
Decision
Conclusion
Neither
Quiz
1. Does notice need to be given when a proprietorship is
incorporated, if it does not change the outcome of the business?
Yes!, It does not matter if the business is directly affected
or not. A company who has incorporated has the duty to
inform people who they are doing business with of the
change in their entity.
2. Does notice of incorporation have to be given orally or written?
It is highly recommended for businesses to let people who
they are doing business with a direct letter, call or notice.
However, as long as the changes made are extremely
apparent to the general public, it can be deemed
reasonable that sufficient notice has been given.
Discussion