WEEK TWO: PARTNERSHIPS AND TRUSTS
Partnerships
Ordinary: partners are jointly and severally liable for all debts
Extraordinary: liability of certain partners is limited
1. Anonymous/ Silent
One of the partners is anonymous i.e. is not disclosed to the public.
As a result, creditors can’t hold the anonymous partner liable but
the other partners can.
2. Partnership en commandite/Silent
One of the partners is anonymous, gives a fixed contribution and
receives a set percentage of the profit. They are only liable to the
extent of their contribution or a pre-determined amount. No active
participation
3. Universal
Assets (past, present and future) are pooled together, like in a
marriage
Essentials of a partnership
1. Each partner must make a contribution – must have an appreciable
commercial value
2. Business must be carried out for their joint benefit – the concept of joint
benefit means that a partnership is not recognized if one partner is
entitled to all the benefits and other is obliged to incur all losses
3. The objective is to make a profit – therefore cannot be NGOs, sports
clubs
4. There needs to be a legitimate contract – agreement must embody
the basic essentials of a partnership and must be entered into with the
clear intention of creating a partnership
Partnerships
Ordinary: partners are jointly and severally liable for all debts
Extraordinary: liability of certain partners is limited
1. Anonymous/ Silent
One of the partners is anonymous i.e. is not disclosed to the public.
As a result, creditors can’t hold the anonymous partner liable but
the other partners can.
2. Partnership en commandite/Silent
One of the partners is anonymous, gives a fixed contribution and
receives a set percentage of the profit. They are only liable to the
extent of their contribution or a pre-determined amount. No active
participation
3. Universal
Assets (past, present and future) are pooled together, like in a
marriage
Essentials of a partnership
1. Each partner must make a contribution – must have an appreciable
commercial value
2. Business must be carried out for their joint benefit – the concept of joint
benefit means that a partnership is not recognized if one partner is
entitled to all the benefits and other is obliged to incur all losses
3. The objective is to make a profit – therefore cannot be NGOs, sports
clubs
4. There needs to be a legitimate contract – agreement must embody
the basic essentials of a partnership and must be entered into with the
clear intention of creating a partnership
