Summary
Summary Notes
- Course
- Business Entities
- Institution
- University Of The Witwatersrand (wits)
Summary of 11 pages for the course Business Entities at wits
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Business Entities Notes 2020Lecture: Partnerships
1. The definition, features and legal nature of a partnership
A Partnership is defined as follows;
Case Law: Pezzutto v Dreyer 1992
It is a legal relationship arising from an agreement between 2 or more persons,
each contributing to an enterprise with the object of making profits and to divide
such profits?
It is an association of 2 or more persons who are contractually bound to one
another to operate a business jointly with the main objective of making a profit
for their common benefit while each partner has to contribute money, property
or services to the joint partnership estate which will be at the disposal of and
subject to the risk of the undertaking.
Case Law: Smith v Anderson states that a Business is anything that occupiers the;
I. Time;
II. Attention
III. Labour of a person for the purpose of profit that is a business.
Furthermore, a partnership is not a separate legal entity, meaning the liabilities
are binding on the partners themselves.
2. The partnership agreement
General requirements for valid formation of contract
I. Must be a valid contract
Animus Contrahendi/ Agreement as to the nature of the contract. Purpose of
what they getting into. Eg. Selling oranges. Parties must intend to make a profit
& Contribution. No need for formal requirements. No need to have it in
writing. Can be oral.
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, Business Entities Notes 2020
Lecture: Partnerships
Must have Capacity. Minor or a person who is mentally ill, can enter into a
partnership by means of a curator or legal guardian.
Performance must be legal & possible. Should not be Conti Bonis Moris in terms
of legality.
II. Must comprise of 2 or more people
Natural/Juristic Persons
Can be artificial e.g. a company can become a partner
III. Intend to make a profit
The profit must be shared amongst the parties.
If one of the partners takes more, then the partnership is dissolved.
Essential elements (essentialia) of partnership agreements and the parties’ intention
The essentialia (essential elements) of the partnership agreement otherwise it will not exits. Each
Partner must make a
i. Contribution. Must bring something of commercial value. Something that cannot be
returned but rather becomes part of the business and the contribution should be enjoyed
by all partners.
ii. Benefit of the parties. Business must carry on for the joint benefit of the parties. The
Parties must share in profits & Losses.
iii. profit It is essential to make a profit for the parties/partners
iv. legitimate contract This contract must be valid/lawful
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