QUESTION 1

The term business association refers to membership organizations that are involved in and
support the business interests of their various members. Business association organizations
are supportive of the promotion of the business interests of their members. The main
objective of business associations is to bring together business owners from a specific area,
and provide a number of benefits to business owners who pay dues, and participate as
members. The Legal nature of any business association determines the extent of its
member’s liability, capacity to borrow finances from financial institutions and the selection
of a suitable business entity before the commencement of any business transactions.
Generally, they’re five (5) main types of business associations. These of which are; sole
proprietorship/sole trader, co-operative societies, statutory corporation, partnership and
companies. The following are brief explanations on the various types of business
associations.
a.) Sole Proprietorship/Sole Trader:
A Sole proprietorship/sole trader is a business that is owned and controlled by one person.
Example of a sole trading business is a hair dressing salon and barbershops. A sole trader is a
one man show enterprise that is usually run with the help of family members and a few
casual employees. This structure is very attractive for those entrepreneurs who wish to have
total control and ownership of the enterprise. In legal terms a ‘Sole trader’ is described as a
person trading under his/her own name or a registered business name.
b.) Co-operative societies:
A co-operative serves as a useful tool for the promotion and enhancement of the interests
of the less powerful members of any society. On one hand a capitalist model of a business
entails that a person must have sufficient capital to start a business while a co-operative on
the other hand allows people that have insufficient resources to put their resources
together, working hard for their common benefit and when profits are realized they are
shared equally without regard to a member contribution of capital. Hence co-operatives are
too frequently formed by individuals who earnestly seek to improve their positions in areas
such as agriculture and marketing.
c.) Companies:
A company is established under the Companies Act Chapter 388 of the laws of Zambia. A
company comes into being when the registrar of companies writes the name of the
company in the register of companies and issues it with a certificate of incorporation. The
certificate which is in the prescribed form (forms in Cap 388) states from the date thereon is
the date on which the company is incorporated. The case of Buckley J. in Tenant v Stanley
1906, it was asserted that “The word company has no strict technical meaning. It involves
two ideas namely first that the association is of persons so numerous as not to be aptly
described as a firm and secondly that the consent of all the other members is not required
for the transfer of a member’s interest.” A company is an artificial person with separate
legal existence from its members which acts only through its agents called directors.
Directors are therefore managers and in some respect may be said to be quasi-trustees or
fiduciaries and agents for the company.
d.) Statutory Corporation:
Although statutory corporations would satisfy the definition of a company for the way they
operate, it is opted to bring them out individually. A statutory corporation is an association
that has two objectives. It has been asserted that a business corporation has an economic
rather than legal connotation. It means a corporate entity with a fixed capital divided into
shares, engaged into some business with the purpose of earning profits and generally
without liability on the part of its members beyond the amount on their contribution. They
are formed to provide supporting services while at the same time making profits and are
funded by the government because of their strategic areas of utility in which they are found.
There is much political control in these statutory corporations. Statutory Corporations are
always formed or created pursuant to an Act of parliament.
e.) Partnership:
A partnership is the relationship which exists between persons carrying on a business in
common with a view of gaining profit while Gogna defines it as an association of two or
more persons who enter into an agreement to carry on a joint business and share the
profits. It can therefore be said in other words that a partnership is a relationship between
individuals who have agreed to share the profits of a business established by them which is
carried on by all or any of them acting for all.
With reference to the situation given, I would advise Bosco venture into a partnership type
of business association with Patel, who will supply him with goods. A Partnership like a sole
proprietorship has no legal status and lacks continuity of existence A partnerships’ lack of
legal status means there is no difference between the owners and the business and
therefore the partners can sue and be sued in their individual capacities. Hence a partner
must have contractual capacity. Partners in a partnership have unlimited liability. This
means that the partners will lose firstly their capital invested in the business for business
debts should the partnership be in financial difficulties and if inadequate, their personal
assets. Partnership relationships come with various advantages. Some of which are:
i.) Less formal with fewer legal obligations: it lacks formality as compared with
managing a limited company.
ii.) Easy to get started: the partners agree easily on whether the partnership should be
created verbally or in writing.
iii.) Sharing the burden: comparing to operating on your own, by working in a
partnership business, you can benefit from companionship.
iv.) Access to knowledge, skills, experience and contacts.
v.) Better decision making: the business benefits from different perspectives brought in
by each partner.
vi.) Privacy
vii.) Ownership and control are combined
viii.) More partners, more capital: the more partners there, the more money they
receive from their combined resources.
ix.) Prospective partners
x.) Easy to access: the profits are shared between the partners, flowing directly
through to the partners personal tax retains rather than initially being retained.

QUESTION 2
Generally, an employer is can be defined as a person or organization that employs people
to perform specific jobs whilst an employee is an individual who was hired by an employer
to do a specific job. However, in law, an employee is a person who is hired for a wage,
salary, fee or payment to perform a specific type of work. They’re various duties that
employer has towards his employees, and vice versa. With reference to the above given
scenario, I will use the duty of mutual trust and confidentiality that an employer has
towards his employee. The duty of mutual trust and confidence means that the employer
must not work in a manner that is calculated or is likely to destroy the mutual trust and
confidence between the parties. This formulation was affirmed in the leading case of Malik
v Bank of Credit and Commerce International, 1997. This duty is based on fairness as an
integral and necessary requirement of a contract of employment. In Malik the plaintiff
Bank in liquidation was found liable for stigma damages for having run a fraudulent
banking operation. The court supported the argument that the bank’s actions had
rendered the plaintiff’s unemployable through their association with the defendant bank
and awarded damages. An employer’s acts that are calculated or likely to injure the
reputation of the employee fall under this general common law duty. With reference to the
scenario given, I would advise the injured to sue their former employer for damages for the
failure to protect the reputation of its employees, rendering them unemployed due to their
association with the Commerce Bank which is known for being run in a corrupt and
dishonest manner.