MRL2601
Assignment 1
Semester 1
Due 6 March 2026
, Question 1
1.1 Advise Ben on the difference between a partnership and a company.
Answer:
Ben needs to understand that a partnership and a company are two very different legal
forms of doing business, especially from a corporate law perspective.
A partnership is not a separate legal person from the partners who form it. This means
that the partnership does not exist independently from the individuals involved. The
partners jointly own the business and are personally involved in its management and
decision-making. Because there is no separate legal personality, the partners are
personally liable for the debts and obligations of the partnership. If the partnership
cannot pay its creditors, the partners’ personal assets may be used to settle those debts
(Havenga et al., 2020).
For example, if Ben and his colleague form a partnership offering aviation legal
consulting services and the partnership incurs debt from an international client dispute,
both partners can be held personally responsible for that debt, even if only one partner
caused the loss.
A partnership is also based on contractual agreement between the partners. It usually
ends if one partner dies, becomes insolvent, or withdraws from the partnership, unless
the partnership agreement provides otherwise. This makes partnerships less stable for
long-term or global business ventures (Du Bois et al., 2021).
A company, on the other hand, is a separate legal person from its owners once it is
registered in terms of the Companies Act 71 of 2008. This means the company exists
independently from its shareholders and directors. It can own property, enter into
contracts, and sue or be sued in its own name (Companies Act 71 of 2008).
For example, if Ben registers a private company that focuses on international aviation
compliance and corporate aviation law, the company itself will be liable for its debts.
Ben’s personal assets will generally be protected, provided he acts within the law.
Assignment 1
Semester 1
Due 6 March 2026
, Question 1
1.1 Advise Ben on the difference between a partnership and a company.
Answer:
Ben needs to understand that a partnership and a company are two very different legal
forms of doing business, especially from a corporate law perspective.
A partnership is not a separate legal person from the partners who form it. This means
that the partnership does not exist independently from the individuals involved. The
partners jointly own the business and are personally involved in its management and
decision-making. Because there is no separate legal personality, the partners are
personally liable for the debts and obligations of the partnership. If the partnership
cannot pay its creditors, the partners’ personal assets may be used to settle those debts
(Havenga et al., 2020).
For example, if Ben and his colleague form a partnership offering aviation legal
consulting services and the partnership incurs debt from an international client dispute,
both partners can be held personally responsible for that debt, even if only one partner
caused the loss.
A partnership is also based on contractual agreement between the partners. It usually
ends if one partner dies, becomes insolvent, or withdraws from the partnership, unless
the partnership agreement provides otherwise. This makes partnerships less stable for
long-term or global business ventures (Du Bois et al., 2021).
A company, on the other hand, is a separate legal person from its owners once it is
registered in terms of the Companies Act 71 of 2008. This means the company exists
independently from its shareholders and directors. It can own property, enter into
contracts, and sue or be sued in its own name (Companies Act 71 of 2008).
For example, if Ben registers a private company that focuses on international aviation
compliance and corporate aviation law, the company itself will be liable for its debts.
Ben’s personal assets will generally be protected, provided he acts within the law.
