The Essential Elements of a Partnership as a Business Entity
TABLE OF CONTENT
1. Introduction ..............................3 2. The essential elements of partnership …………………..4 3. Bibliography ……………...…..13 4. Table of Cases ………………....13
Introduction
The partnership as a form of business enterprise developed from the concept that if two of more individual owners joined forces a stronger entity would develop because they would then have at their disposal their combined resources, financial, skills and others. The South African law of partnership is largely governed by common law principles,[1] which is similar in Namibia.
A partnership may be described as a legal relationship that arises contractually between it is concluded between two or more persons (but normally not more than 20 persons)[2], in terms of which each partner must undertake to contribute the common business, with the objective of making and sharing of profits between each of them.[3]
A partnership is not a corporate entity. It does not have a separate legal persona and this has several important legal consequences: in the relationship between the parties all rights and duties only exist between the partners inter se, the rights and duties of the partnership are the rights and duties of the partners and the continued existence of the partnership depends on the continued participation of partners in the partnership hence it has no perpetual succession.
This paper will look at how the courts have used essentialias of a partnership, formulated by Pothier, in deciding whether or not a partnership had been established.
The essential elements of partnership
Partnerships are created by contract. Thus for a partnership to be validly formed all the general requirements as regards to contractual validity must be met. Moreover for an agreement to be one of partnership consensus must have been reached on all the essential terms of partnership.
The general principles of contractual
1. Introduction ..............................3 2. The essential elements of partnership …………………..4 3. Bibliography ……………...…..13 4. Table of Cases ………………....13
Introduction
The partnership as a form of business enterprise developed from the concept that if two of more individual owners joined forces a stronger entity would develop because they would then have at their disposal their combined resources, financial, skills and others. The South African law of partnership is largely governed by common law principles,[1] which is similar in Namibia.
A partnership may be described as a legal relationship that arises contractually between it is concluded between two or more persons (but normally not more than 20 persons)[2], in terms of which each partner must undertake to contribute the common business, with the objective of making and sharing of profits between each of them.[3]
A partnership is not a corporate entity. It does not have a separate legal persona and this has several important legal consequences: in the relationship between the parties all rights and duties only exist between the partners inter se, the rights and duties of the partnership are the rights and duties of the partners and the continued existence of the partnership depends on the continued participation of partners in the partnership hence it has no perpetual succession.
This paper will look at how the courts have used essentialias of a partnership, formulated by Pothier, in deciding whether or not a partnership had been established.
The essential elements of partnership
Partnerships are created by contract. Thus for a partnership to be validly formed all the general requirements as regards to contractual validity must be met. Moreover for an agreement to be one of partnership consensus must have been reached on all the essential terms of partnership.
The general principles of contractual
Bibliography: 1. J. T. R. Gibson, C. Visser & JT Pretorius & R. Sharrock & M Van jaarsveld South African mercantile and company law 8th ed (2005) 2 [14] J. T. R. Gibson, C. Visser & JT Pretorius & R. Sharrock & M Van Jaarsveld South African mercantile and company law 8th ed (2005) [15] P