Download BUS107 T3 2022 Assessment 3 - Case Study V2 (1)

Assessment 3 Case Study
Jean is passionate about coffee and opens a café called Jean’s Coffee Shop. She
purchases and installs a coffee machine for the café from a supplier named
Kitchenware. The coffee machine has a safety defect and squirts hot coffee all over
Jean although, thankfully, she is not injured.
Jean hires Ramona as a barista for the café. The business grows rapidly and has
many loyal customers. Ramona asks Jean for a share of the business profits on the
basis that her hard work and contribution effectively make her a business partner.
Jean explains to Ramona that she is an employee, not a partner, and will be paid a
salary only. However, Jean wonders if her understanding of the law of partnerships
is correct.
Jean incorporates the business into a company named Jean’s Coffee Shop Pty Ltd.
Jean is one of three directors under the new corporate structure. The company
raises capital to expand the business by issuing shares to shareholders. Jean’s best
friend, Jordan, owns a business that supplies milk. The pandemic has caused
financial hardship for Jordan as he has not been able to sell products overseas.
Jordan offers Jean a $50,000 commission if she arranges for Jean’s Coffee Shop
Pty Ltd to enter a supply agreement with him. Jean enters the supply agreement with
Jordan on behalf of Jean’s Coffee Shop Pty Ltd. She does not disclose the $50,000
commission to the other directors or the shareholders. The shareholders of Jean’s
Coffee Shop Pty Ltd are not happy with the new supply agreement and threaten to
take legal action against Jean.
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