06 July 2011
Mr. X is a Gym Instructor. He has taken up the management of the Gym. There is a Memorandum of Understanding between Mr. X and the real owner of the Gym, and there is a clause in the MOU that Mr. X will get a specific share of Profit from the Gym receipts. Whether such MOU is valid?
06 July 2011
It is an MOU and agreeable to both the parties and in the absence of sharing losses it can not be a partnership firm.
* The sum receivable by X is based on the receipts of the GYM and as such there is nothing illegal in the agreement so that it can be said as an illegal MOU. * The MOU is ,thus, a valid MoU.
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