Question Three: 10 marks

Memorandum

To: Junior Lawyer

From: Partner

Subject: New Client – Sam Bennington

Hi, I’ve just met with a new client. His name is Sam Bennington, a software

engineer with IBM who is looking to establish a new gym business. He came to

see me today seeking advice on ways that he could structure this proposed

business venture.

In our conversation, Sam identified a number of key concerns for you to consider.

This included:

• A desire to minimise his overall tax liabilities;

• How his choice of business structure may impact on the raising of capital

to fund the venture;

• Mechanisms that he could implement to ensure that he is protected from

any poor management decisions made by his partners; and

• Ways in which he can ensure control over the day-to-day decisions of

the business.

Luckily, I have recorded his conversation. Your job is to watch this back and

provide a memorandum of advice for the client. Your advice should include a brief

discussion of the strengths and weaknesses of each potential option, keeping in

mind the specific needs of the client. Remember to include specific

recommendations on what Sam should do – the client isn’t paying us for nothing!

You can watch the video here. I’ll leave you to get started, and don’t forget to take

notes!

Good luck!

Required:

After watching the video, provide a memorandum of advice to the

client (Sam).

HINT: In your memo, you are required to advise Sam of the potential ways

in which he could structure his business, including the strengths and

weaknesses of each option for his specific circumstances. You must also

consider Sam’s assets and liabilities when giving advice and the key

considerations outlined in the client’s instructions.