MRL2601
Assignment 1
Semester 1
2026
, MRL2601 – ENTREPRENEURIAL LAW
Assignment 01 | Semester 1: 2026
Department of Mercantile Law – University of South Africa
QUESTION 1
1.1 The Difference between a Partnership and a Company
In advising Ben, it is necessary to distinguish between a partnership and a company
as two distinct forms of business enterprise recognised under South African law. The
relevant legal framework includes the common law governing partnerships and the
Companies Act 71 of 2008 regulating companies.
1. Legal Status
A partnership does not possess separate legal personality. It is not a legal person
distinct from its partners. The partners themselves are collectively the business, and
the partnership exists only as a contractual arrangement between them.
Consequently, a partnership cannot own property, sue, or be sued in its own name
these acts are performed through the partners personally.
A company, by contrast, is a juristic person with full legal personality separate from its
shareholders and directors. Upon incorporation under the Companies Act 71 of 2008,
the company acquires the ability to own property, enter into contracts, sue and be
sued in its own name independently of its members.
2. Ownership of Assets
In a partnership, assets contributed to or acquired by the partnership are jointly owned
by the partners in undivided shares. The partners hold these assets together and no
single partner can claim exclusive ownership of a specific asset without the consent
of the others.
In a company, assets belong to the company itself as a separate legal entity.
Shareholders do not have direct ownership of the company's assets. Instead, they
hold shares in the company, which confer certain membership rights. This principle
Assignment 1
Semester 1
2026
, MRL2601 – ENTREPRENEURIAL LAW
Assignment 01 | Semester 1: 2026
Department of Mercantile Law – University of South Africa
QUESTION 1
1.1 The Difference between a Partnership and a Company
In advising Ben, it is necessary to distinguish between a partnership and a company
as two distinct forms of business enterprise recognised under South African law. The
relevant legal framework includes the common law governing partnerships and the
Companies Act 71 of 2008 regulating companies.
1. Legal Status
A partnership does not possess separate legal personality. It is not a legal person
distinct from its partners. The partners themselves are collectively the business, and
the partnership exists only as a contractual arrangement between them.
Consequently, a partnership cannot own property, sue, or be sued in its own name
these acts are performed through the partners personally.
A company, by contrast, is a juristic person with full legal personality separate from its
shareholders and directors. Upon incorporation under the Companies Act 71 of 2008,
the company acquires the ability to own property, enter into contracts, sue and be
sued in its own name independently of its members.
2. Ownership of Assets
In a partnership, assets contributed to or acquired by the partnership are jointly owned
by the partners in undivided shares. The partners hold these assets together and no
single partner can claim exclusive ownership of a specific asset without the consent
of the others.
In a company, assets belong to the company itself as a separate legal entity.
Shareholders do not have direct ownership of the company's assets. Instead, they
hold shares in the company, which confer certain membership rights. This principle
