LAW OF PARTNERSHIP - PowerPoint PPT Presentation

the partnership as business form n.
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LAW OF PARTNERSHIP
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LAW OF PARTNERSHIP

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  1. THE PARTNERSHIP AS BUSINESS FORM LAW OF PARTNERSHIP

  2. PARTNERSHIP AGREEMENT • Required for formation of contract • General requirements for valid contract • Contractual capacity (minor; companies) • Consensus • Lawfulness (Companies Act; Certain professions) • Performance possible • Formalities

  3. ESSENTIAL ELEMENTS • Joubert v Tarry (1915) – relied on Pothier 1. Contribution Commercial value Money, expertise, usage, goods 2. Profit as object Patrimonial benefit ( also prevent expenses, etc) De Groot: “gemene baat te trekken” Charitable organisations 3. Do business for joint benefit Business = time, labour, atention Patrimonial benefit Right to share in profits Not necessary to share equally Sensible to stipulate in contract sharing of profit 4. Legitimate purpose

  4. ESSENTIAL ELEMENTS Bester v Van Niekerk (1960) Fourth element dropped How do we know whether a partnership was formed? • Joubert v Tarry Facts (Joubert, Gascoyne; Bellevue Colliery; Tarry) Presence of essentialia “Makes no difference what the parties have called it”

  5. ESSENTIAL ELEMENTS • Pezzutto v Dreyer (1992 Court of Appeal) Confirmed the four essentiala Contribution need not be the same; something “appraciable” Business need not be a continuous one (project/venture) If 4 elements are present – partnership – unless intention different Conclusion: • Essentiala present • Intention of the parties Critique: too much attention on intention and not on associative element

  6. NATURALIA • Proportion in which profits are shared If there is an agreement If there is no agreement • Proportion in which losses are shared Exemption agreement No exemption agreement • Power of representation Agreement No agreement • Compensation for contribution No compensation for contribution – profit sharing • Co-ownership

  7. PARTNERSHIP FUND • Conributions form part of partnership fund Ownership = forms part of partnership property Use = right of use forms part of p/s property • Co-owners of assets of fund in joint undivided shares Size of share depends on agreement /profit/equal 4 books are contributed by four partners Practical importance dissolution or liquidation • Does something form part of partnership fund? (agreement/intention) • 3rdparties = transfer in terms of law of things Constructive delivery

  8. RESTRICTED USAGE • Partnership asset only use for partnership purpose • Own use = liable towards partnerships • Permission