ADMIN
[COMPANY NAME]
, QUESTION 1 Explain, with reference to relevant prescribed case
law for this module, how the court determines whether a specific
business is a partnership. (10)
To explain how a court determines whether a specific business
constitutes a partnership, it's crucial to refer to relevant case law and
legal principles:
1. Definition of Partnership: Under South African law, a
partnership is defined as a relationship in which two or more
persons carry on a business together with the aim of making a
profit.
2. Case Law Principles:
o Carr v Carr (1908): This case established that mere joint
ownership of property does not necessarily constitute a
partnership. There must be evidence of mutual agreement
to carry on a business with a view to profit.
o Wessels v Beukes (1924): Here, the court emphasized
that the intention to carry on a business must be mutual
and explicit, not just inferred from joint ownership or
joint work.
o Van Rensburg v Moolman (1963): This case
highlighted that profit sharing alone is not determinative
of a partnership; the essential element is the intention to
carry on a business together.
3. Factors Considered by Courts:
o Mutual Agency: Whether each partner can act on behalf
of the others and bind them legally.
o Profit Sharing: While not conclusive, it's a strong
indicator of a partnership.