Summary
Summary ODR320: EVERYTHING FOR SEMESTER TEST 1 (2023) PARTNERSHIPS AND CLOSED CORPORATIONS
- Course
- Institution
(LECTURE NOTES + CASE LAW + LEGISLATION)
[Show more]
Seller
Follow
kiaradavey
Reviews received
Content preview
ODR 320NOTE: THESE NOTES WERE COMPILED BY KL DAVEY. PLEASE DO
NOT RESELL THEM. ALL CREDIT GOES TO THE RELEVANT
TEXTBOOKS, LECTURERS, LEGISLATION AND CASE LAW. I DO NOT
CLAIM ANY OF THIS WORK TO BE MY OWN. I AM NOT LIABLE FOR
ANY MISINFORMATION OR MISSING INFORMATION.
, OVERVIEW
Partnerships Close Corporations Companies
Legislation Contract Close Corporations Companies Act 71
Act of 2008
Legal personality No YES YES
Sequestration/Liquidated Sequestrated Liquidated Liquidated
Management General rule - partners General rule – Board of directors –
members (1-10) s 66
Representation Partner (mutual mandate) Member – s 54 or Board of directors or
or agent agent agent
General rule - Within
Scope of partnership S54 = Member
business (scope of business
is irrelevant)
Formalities Contract (oral or tacit) Registration and Registration and
disclosure disclosure
Ownership Partners co-ownership Member’s interest Shareholders
(%) Exception – NPC-
Members (no
Members)
Constitution Partnership agreement Founding Statement Memorandum of
Optional – Incorporation
Association Optional –
Agreement Shareholders’
agreement
Personal liability Yes No, save for certain No, save for certain
exceptions exceptions
Perpetual succession No Yes Yes
DISCLAIMER: THESE NOTES WERE COMPILED BY KL DAVEY. PLEASE DO NOT SHARE OR RESELL THEM. ALL
CREDIT GOES TO THE RELEVANT TEXTBOOKS, LECTURERS, LEGISLATION AND CASE LAW. I DO NOT CLAIM ANY
OF THIS WORK TO BE BY OWN. I AM NOT LIABLE FOR ANY MISINFORMATION OR MISSING INFORMATION.
, STUDY UNIT 2: PARTNERSHIPS
INTRODUCTION
General
A partnership is established through an agreement (no formalities are required so it
can be oral)
- Main aim of partnership à acquisition of a material / patrimonial benefit
> A partnership cannot be for the purpose of anything else.
- Partnerships cannot be created unilaterally.
LEGAL NATURE OF A PARTNERSHIP
Entity theory
Partnership à business structure which exists separately from members, it can
acquire assets and liabilities, but partners are liable for the liabilities
- Not used in SA.
Aggregate theory
Partnership à contractual association of specific persons which does not possess
legal personality.
- Rights and obligations of the partnership are the rights and obligations of the
partners.
- Used in SA.
Effects of aggregate theory
- Partnership is dissolved when membership changes (due to death, retirement of
admission of a member).
> Once dissolved à legal duties still remain intact (such as debt).
- Assets and liabilities belong to all the owners in undivided co-ownership shares.
DISCLAIMER: THESE NOTES WERE COMPILED BY KL DAVEY. PLEASE DO NOT SHARE OR RESELL THEM. ALL
CREDIT GOES TO THE RELEVANT TEXTBOOKS, LECTURERS, LEGISLATION AND CASE LAW. I DO NOT CLAIM ANY
OF THIS WORK TO BE BY OWN. I AM NOT LIABLE FOR ANY MISINFORMATION OR MISSING INFORMATION.
, Exceptions to the aggregate theory à when partnerships are treated as a separate
entity
1. Litigation – (someone is suing partnership)
- General rule: summons must include name of all partners
> But sometimes you miss a name à Defect in summons (now you need to
start again).
- Rules of Court: allow partnership to be sued in its business name
> For practical purposes due to the cumbersome nature of a defect in a
summons.
> Liability remains the same among partners.
2. Sequestration
- Each partnership has an application for sequestration brought against them
(multiple applications).
> Sequestration proceedings occur simultaneously and separately.
- The partnership estates and individual partners estates are sequestrated
> Any surplus from individual partners estate goes into the partnership
estate to pay off creditors of partnership estate (not individual partners
creditors).
> When the surplus is more than what is needed to pay off liabilities in the
partnership estate partners take a pro rata share of the surplus (according
to their contribution).
- During existence of the partnership à partners are jointly liable
> But once partnership dissolved: jointly liable à jointly and severally liable
- ‘Jointly and severally liable’
> Creditor can choose to claim back debt from one, two or all members.
> Right of recourse for the partner who has to pay all the debt à issue
summons against his partners
DISCLAIMER: THESE NOTES WERE COMPILED BY KL DAVEY. PLEASE DO NOT SHARE OR RESELL THEM. ALL
CREDIT GOES TO THE RELEVANT TEXTBOOKS, LECTURERS, LEGISLATION AND CASE LAW. I DO NOT CLAIM ANY
OF THIS WORK TO BE BY OWN. I AM NOT LIABLE FOR ANY MISINFORMATION OR MISSING INFORMATION.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller kiaradavey. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.55. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
62890 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now