MRL2601 Assi1

UNIVERSITY OF SOUTH AFRICA
FACULTY OF LAW
DEPARTMENT OF MERCANTILE LAW
NAME AND INITIALS: MAGORO E.L
STUDENT NO: 69144419
MODULE: ENTREPRENEURIAL LAW
MODULE CODE: MRL2601
UNIQUE NO: 635450
TASK: ASSIGNMENT NO: 1
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TABLE OF CONTACT
CONTENT PAGE
QUESTION 1……………………………………………………………………………..1
QUESTION 2……………………………………………………………………………...1-2
QUESTION 3……………………………………………………………………………...3
QUESTION 4………………………………………………………………………………3
QUESTION 5………………………………………………………………………………3
REFERENCES…………………………………………………………………………….4
DECLARATION……………………………………………………………………………4
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Question 1.
Types of partnerships.
1. Universal and particular partnerships

Universal partnerships are different from other types of partnerships in their ambit
meanly because they are not restricted to a particular transaction or a specific business.
They are two types of universal partnerships which are differentiated in this way: the
societas universorum bonorum and the societas universorum quae exquastu veniunt.
The societas universorum bonorum is a partnership of all property that will generally
take place within the context of marriage. The societas universorum quae exquastu
veniunt is a partnership of all profit which occurs within the context of commercial
undertakings.
Particular partnerships are established in respect of a specific project, such as the
construction of a block of flats.
2. Ordinary and extraordinary partnerships

In Extraordinary partnerships the liability of certain of the partners to the third parties
may be limited. They are three types of extraordinary partnerships which are
differentiated as follows: the anonymous partnership (also called the “silent
partnership”), the partnership encommandite and special partnerships which were
registered under the now repealed Special Partnerships Limited Liabilities Act of the
Cape Province and Natal.
With the anonymous or silent partnership the business is conducted by one of the
partners in his or her name. While an anonymous or silent partner remains undisclosed
to the public, he or she is not liable to third parties for the debts of the partnership. He or
she remains liable to his or her partner for his or her proportional share of the
partnership losses. In this case, he or she shares the full risk of the enterprise.
In a partnership encommandite, the business of the partnership is also carried on in the
name of one or more of the partners, but every partner whose name is not disclosed is
only liable to the other parties to the extent of the fixed amount of the agreed capital
contribution made by him or her. Therefore, if the partnership incurs losses, the liability
of the partner encommandite will not exceed the fixed amount.
Special partnerships which were registered under the now repealed Special
Partnerships Limited Liabilities Act of the Cape Province and Natal were partnerships
where the limited liability of a special partner would be lost if his or her name was
employed in the name of the firm or if he or she personally entered into a transaction on
behalf of the partnership.
Question 2.
Scenario 1: Petrus in his will bequeaths his farm to his two sons on condition that they
farm in partnership.
Here the is not valid partnership agreement because it is a contra bonos mores to
forces people to work in a partnership
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Scenario 2: Lenta, an 82-year-old unmarried woman and Maxfed (Pty) Ltd conclude a
partnership agreement.
Here there is a valid partnership agreement because partnership was concluded
between an unmarried woman and a company that is recognized as legal person.
Scenario 3: A few pharmacists conclude a partnership agreement with the aim of
repackaging and selling stolen medication
Here there is on partnership agreement as partnership is formed by concluding a valid
legal contract. They must be a valid contract between the parties. In this scenario the is
no valid contract and the object of the contract is illegal.
Scenario 4: Dobby, an eleven-year-old with assistance from his guardian concludes a
partnership agreement with Playco CC with the aim of marketing and distributing toys.
Here a valid contract came to existence as a minor is with help from the parent and can
enter into partnership agreement with a close Corporation that is recognized as a
separate legal person.
Question 3.
Can partnership be recognized as a separate entity?
Partnerships differ from companies in the sense that they do not have to be registered
with the registrar but they also do not acquire their own separate legal personality. A
partnership does not exist independently from the partners. Section 8(3) of the
Companies Act1 determines that no association formed for the purpose of acquisition of
gain by the association or its members will be legal unless it is registered. Partnership
agreements are not registered with the Companies and Intellectual Property
Commission under the South African law or any other law. The rights and obligations of
the partnership are those of the partners and the assets belong to the partners. When
one of the partners dies or retires, the partnership dissolves.
In Sacks v Commissioner for Inland Revenue2, the court held that, unless a partnership
agreement provided receipts of income of a partnership were, so received by the
partners in common and only when the time arose at the end of an accounting period
the partner become entitled to claim a separate determinable share of the partnership
profits. This position has been altered by section 24H of the Income Tax Act 58 of
19623, which ensures that each partner is regarded as carrying on the business of the
partnership.
The general rule is that a partnership does not exist independently.
Question 4.
Formation of a valid trust.

Trusts must be created by virtue of a trust deed or instrument. In order to form a trust,
the intention to create a trust must exist. The intention or instruction to the trustee to
manage the trust assets for the beneficiaries must be expressed as an obligation in a
1
Section 8(3) of the Companies Act 71 of 2008.
2
The case of Sacks v Commissioner for Inland Revenue 1946 AD 31.
3
Section 24H of the Income Tax Act 58 of 1962.
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written trust deed. The must be a valid declaration of the trust, 3 certainties with are
intention, subject and matter. The settlor must demonstrate intention in order for the
trust to exist otherwise it may be treated as a gift. In the case of Estate Price v Baker
and Price4, a will provided for a usufruct in favour of the surviving spouse “in order that
she may be better enabled to maintain our children until they become of age or they
marry”. The court held that no trust had been created and that the children were not
beneficiaries, as the words in the will only expressed a desire and not an obligation.
The surviving spouse in terms of the will was enabled to use the income to maintain the
children but not obliged. This is insufficient for the formation of a trust. The trust must be
established for a lawful purpose and the trust property must be clearly defined.
Beneficiaries of the trust must be clearly identified. At least one beneficiary needs to exit
and at least one trustee must be appointed either in terms of the trust deed or,
alternatively, by the Master. A trust deed must be concluded in writing. If the trust is
formed in a will, the required formalities for a valid will must also be adhered to. In other
words, two witnesses above the age of 16 years, along with the testator, must sign the
testament in which the trust is created, and such witnesses may not be a beneficiary of
the will.
Question 5.
Duties of a trustee in relation to a business trust

 A duty of care, skill and diligence
 To open a separate trust account at a banking institution
 To indicate in his or her bookkeeping the property held as trustee
 To make trust and trust investment accounts identifiable as such
 To keep all documents as proof of investments for five years
4
The case of Estate Price v Baker and Price (1905) 22 SC 321.
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REFERENCES.
 Muckleneul, Entrepreneurial law Study Guide (MRL2601), University of South
Africa. Pretoria (2018-2020).
 Piet Delport, New Entrepreneurial Law (2021)
 Clark, Norman (30 September 2016). Better carrots for partner compensation
strategies.
ACADEMIC HONESTY DECLARATION
Declaration
1. I understand what academic dishonesty entails and am aware of Unisa’s policies in this regard.
2. I declare that this assignment is my own, original work. Where I have used someone else’s work I
have indicated this by using the prescribed style of referencing. Every contribution to, and
quotation in, this assignment from the work or works of other people has been referenced
according to this style.
3. I have not allowed, and will not allow, anyone to copy my work with the intention of passing it off
as his or her own work.
4. I did not make use of another student’s work and submitted it as my own.
NAME: Magoro Emelda Leschen
SIGNATURE or ID/PASSPORT NUMBER: 9611070496083
STUDENT NUMBER: 69144419
DATE: 15 March 2023
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UNIVERSITY OF SOUTH AFRICA

NAME AND INITIALS: MAGORO E.L

STUDENT NO: 69144419

MODULE: ENTREPRENEURIAL LAW

MODULE CODE: MRL2601

UNIQUE NO: 635450

TASK: ASSIGNMENT NO: 1

1. Universal and particular partnerships

2. Ordinary and extraordinary partnerships

Can partnership be recognized as a separate entity?

Formation of a valid trust.

Duties of a trustee in relation to a business trust

ACADEMIC HONESTY DECLARATION

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