FBE2604 Assignment 1
(COMPLETE ANSWERS)
Semester 2 2023 - DUE 8 August
2023.100% CORRECT questions, answers, workings and explanations. for assistance. .......... Sello, Thabelo and David want to start a partnership with the aim of selling Solar batteries. Sello intends to contribute R25 000.0...
FBE2604 Assignment 1
(COMPLETE ANSWERS)
Semester 2 2023 - DUE 8 August
2023.
, A partnership is a legal business structure where two or more individuals
come together with the shared goal of running a business and sharing in
the profits and losses. Each partner contributes something to the
partnership, whether it's capital, skills, labor, or property, and they have a
mutual understanding of how the business will be managed and operated.
In the case of Sello, Thabelo, and David wanting to start a partnership to
sell solar batteries, let's analyze each contribution:
Sello's Contribution:
Sello intends to contribute R25,000.00 in capital to the partnership. This
contribution is in the form of money, which is a common way for partners to
invest in the business. However, he conditions his contribution on the
agreement that if the partnership fails, Thabelo and David will be
responsible for reimbursing him.
While contributions to partnerships are standard, the condition attached to
Sello's investment raises some concerns. In a typical partnership, each
partner shares in the profits and losses of the business according to their
ownership percentage. If the partnership fails, all partners typically share
the losses according to their agreed-upon ownership stakes. Sello's
condition, therefore, deviates from the usual principles of partnership,
potentially making the partnership agreement invalid or legally complicated.
Thabelo's Contribution:
Thabelo intends to contribute his expertise as an electrician. This
contribution can be valuable to the partnership as it brings specific skills
that are directly relevant to the business of selling solar batteries. Expertise
and skills can be considered as a form of intangible capital in a partnership.
David's Contribution:
David plans to contribute the use of his Hilux pickup truck. This contribution
can also be valuable to the partnership, especially if the business involves
transportation of goods like solar batteries. However, it's essential to clarify
the terms and conditions regarding the usage of the truck, such as who will
cover maintenance costs, fuel, and any liabilities associated with the truck's
use.
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