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LECTURE 1.  Different meanings:  Agreement giving rise distinctive legal relationship  Specific legal relationship arising from agreement  Association.

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Presentation on theme: "LECTURE 1.  Different meanings:  Agreement giving rise distinctive legal relationship  Specific legal relationship arising from agreement  Association."— Presentation transcript:

1 LECTURE 1

2  Different meanings:  Agreement giving rise distinctive legal relationship  Specific legal relationship arising from agreement  Association of persons created by agreement

3  Agreement / contract  2-20 (influence of new Companies Act)  Contribution  Joint benefit of parties  Profit

4  Number of partners:  2-20 partners  Not only one member  Object of the partnership:  Material or patrimonial benefit  See Ally v Dinath: “gemeen baat trekken”

5  Associative element:  affectio societatis = working together as equals to make profit  No legal personality:  Contractual association of persons  Informal formation:  No formalities  No registration  Oral, written agreement  Tacitly through conduct

6  Oldest  Traced back to Greek, Roman and Roman Dutch law  Influenced development of other business forms/law

7  Legislation  No Act  Other legislation e.g. Attorneys Act etc  At the moment no project to codify law of partnerships  Common law  Based on Roman Dutch Law  Jurists like Grotius, Van der Linden, Van Leeuwen and Voet  Appeal Court in Robson v Theron = Potier

8  Internationally: Entity theory and aggregate theory  Entity theory  USA, Netherlands, Scotland  Partnership independent from members  Own rights and obligations; assets and liabilities  Party to litigation (sue and be sued in own name)  Partners still responsible for debt  Aggregate theory  South Africa  Partnership merely a contractual association of persons  Rights and obligations; assets and liabilities those of partners  No party to litigation  Partners responsible for debt  Dissolves when members change

9  Theories not followed dogmatically, exceptions to aggregate theory  Litigation  Individual partner not sued for partnership debt during subsistance  Individual partner cannot enforce partnership claim  In principle partners sued jointly in own names during subsistance  However Rules of Court: may be sued in business name; first assets of partnerships, then assets of partners  Sequestration  Insolvency Act treats partnership as seperate entity  Partnership sequestrated – ordinary partners’ estates + partnerships are sequestrated  Process

10  Type 1: Universal partnership  Societas universorum bonorum Partnership of all property Partnership of all property owned as well as future property (business and other) Usually a cohabitive relationship Schrepfer v Ponelat  Societas universorum quae ex quastu veniut Partnership of all profit Contribute all profits from business More accurate: general trading partnership

11  Type 2: Extraordinary partnerships Liability limited in some or other way Should have ordinary partner Limited liability can be lifted Silent partnerships Partnerships en commandite

12  Silent partnership:  Partnership in name of some partners  Not liable whole debt to creditors  Pro rata liable towards partners for losses  Partnership en commandite  Same as silent partnership  Fixed profit share  Only liable for losses to a fixed amount

13

14  Lived together in an Islamic relationship Plaintiff claimed assets, labour, income pooled  Q1: Was a universal partnership tacitly created?  Q2: Not intened to make profit  Q3: Tacidly terminated

15  Q1: Was a universal partnership tacitly created?  Q2: Not intened to make profit  Q3: Tacidly terminated  Yes  Dismissed – savings costs  Yes – relationship irretrievably broken down


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