, 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 determine whether a specific business is a partnership, the
court considers various factors and principles derived from case
law and statutory definitions. In South Africa, the determination is
guided primarily by the Partnership Act 1890 and common law
principles. Here’s an outline based on relevant prescribed case
law:
Definition and Legal Framework
1. Partnership Definition:
o According to the Partnership Act 1890, a partnership is
defined as the relationship that subsists between persons
carrying on a business in common with a view to profit.
2. Elements of a Partnership:
o Business: There must be a business activity being
carried out.
o In Common: The business must be conducted jointly
by the parties.
o Profit: The primary motive must be to earn profit.
Key Factors Determined by Case Law
1. Mutual Agency:
o In Ex parte Kearns (1913 TPD 553), the court
emphasized that each partner acts as an agent for the
other, implying that a partnership involves mutual
agency, where each partner can bind the other in
business transactions.