Madge is an actor who wishes to turn her talents towards producing and directing works of drama.

Madge is an actor who wishes to turn her talents towards producing and directing works of drama. She has an amount of $8,500 which she wishes to contribute towards the setting up of her own theatrical group in order to fulfil her ambition. She does not know any wealthy persons who would be prepared to risk the $60,000 minimum capital which she estimates is necessary for the purposes of leasing suitable premises, providing equipment, etc. She does have a group of about 25 theatrical acquaintances who would be interested in forming an experimental theatre group, and who would be prepared to risk an amount between $1,000 and $5,000, depending on individual circumstances. Madge knows very little about matters of business but she does know she would like her group to operate along democratic lines while she retains the ‘upper hand’.

Discuss the advantages and disadvantages and problems you foresee for Madge and for the other members should Madge’s group operate as a partnership, looking particularly at:

a. How would the group operate?

b. The liability of individual investors for ‘group’ debts, and ‘group’ contracts and ‘group’ torts.

c. The liability of Madge.

d. Whether the group can hold property.

e. Should the group decide to operate as a company what type of company would best suit their purposes, and why?

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