Transcript LAW OF PARTNERSHIP - Learning

LECTURE 1
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Different meanings:
 Agreement giving rise distinctive legal relationship
 Specific legal relationship arising from agreement
 Association of persons created by agreement
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Agreement / contract
2-20 (influence of new Companies Act)
Contribution
Joint benefit of parties
Profit
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Number of partners:
 2-20 partners
 Not only one member
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Object of the partnership:
 Material or patrimonial benefit
 See Ally v Dinath: “gemeen baat trekken”
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Associative element:
 affectio societatis = working together as equals to make
profit
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No legal personality:
 Contractual association of persons
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Informal formation:
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No formalities
No registration
Oral, written agreement
Tacitly through conduct
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Oldest
Traced back to Greek, Roman and Roman
Dutch law
Influenced development of other business
forms/law
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Legislation
 No Act
 Other legislation e.g. Attorneys Act etc
 At the moment no project to codify law of
partnerships
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Common law
 Based on Roman Dutch Law
 Jurists like Grotius, Van der Linden, Van Leeuwen and
Voet
 Appeal Court in Robson v Theron = Potier
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Internationally: Entity theory and aggregate theory
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Entity theory
 USA, Netherlands, Scotland
 Partnership independent from members
 Own rights and obligations; assets and liabilities
 Party to litigation (sue and be sued in own name)
 Partners still responsible for debt
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Aggregate theory
 South Africa
 Partnership merely a contractual association of persons
 Rights and obligations; assets and liabilities those of partners
 No party to litigation
 Partners responsible for debt
 Dissolves when members change
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Theories not followed dogmatically, exceptions to aggregate theory
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Litigation
 Individual partner not sued for partnership debt during subsistance
 Individual partner cannot enforce partnership claim
 In principle partners sued jointly in own names during subsistance
 However Rules of Court: may be sued in business name; first assets of
partnerships, then assets of partners
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Sequestration
 Insolvency Act treats partnership as seperate entity
 Partnership sequestrated – ordinary partners’ estates + partnerships are
sequestrated
 Process
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Type 1: Universal partnership
 Societas universorum bonorum
Partnership of all property
Partnership of all property owned as well as future
property (business and other)
Usually a cohabitive relationship
Schrepfer v Ponelat
 Societas universorum quae ex quastu veniut
Partnership of all profit
Contribute all profits from business
More accurate: general trading partnership
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Type 2: Extraordinary partnerships
Liability limited in some or other way
Should have ordinary partner
Limited liability can be lifted
Silent partnerships
Partnerships en commandite
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Silent partnership:
 Partnership in name of some partners
 Not liable whole debt to creditors
 Pro rata liable towards partners for losses
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Partnership en commandite
 Same as silent partnership
 Fixed profit share
 Only liable for losses to a fixed amount
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Lived together in an Islamic relationship
Plaintiff claimed assets, labour, income
pooled
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Q1: Was a universal partnership tacitly
created?
Q2: Not intened to make profit
Q3: Tacidly terminated
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Q1: Was a universal partnership tacitly
created?
Q2: Not intened to make profit
Q3: Tacidly terminated
Yes
Dismissed – savings costs
Yes – relationship irretrievably broken down