Tutorial 1
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Partnership
Busisiwe and Brent should adopt a Partnership. A partnership is an agreement between two
or more persons whereby both parties are willing to make contributions, which in this
scenario it is stated that they are both willing to contribute their personal assets. This is
beneficial as there will be a bigger drive to make profits as their own personal assets are on
the line.
Furthermore, a Partnership will be more beneficial to them as it does not have a Juristic
personality which means there are no strict laws governing the partnership which means
they can act as they want within the realms of the law. Moreover, with no juristic person
Busiswe and Brent will be the only ones involved in the managerial department which
means they can take control of their company to ensure the intention of making profits is
met.
Sole Proprietorship
This option would not be suitable as there are two persons – Busiswe and Brent.
Furthermore, the sole proprietorship has minimal financing options as there is only one
owner contributing to the business.
Close Corporations
The companies Act of 2008 bought an end to the close corporations nevertheless, this
would not be a suitable option in this scenario as they want to be the only two in control
however with a close corporation there can be 1 to 10 members and in every case each
member shares the percentage of interest and thereby shares the control.
Question 2:
Each member had to pay a joining fee of R5 000 which indicates they are bound to the
organization. Beauty for Men was established 2 years ago and the Companies act states
from s19 that “from the date and time that the incorporation of a company is registered, as
stated in its registration certificate the company is a juristic person.” A Juristic person is a
legal subject that is capable of having rights and obligations with the capability of owning
assets, concluding contracts and suing and being sued.
Beauty for Men concluded a contract with James and Mitch. Therefore, since Beauty for
Men is a juristic person they have a personal right against James and Mitch. James and
Mitch have been performing in improper conduct by taking clients for their own business
and not for that of the association. Therefore, Beauty for men can claim damages against
James and Mark for their improper behavior.
Furthermore, since Beauty for Men is a registered association they are therefore a juristic
personality and can have locust standi against James and Mitch.
,Question 3:
In this case there will be a Piercing of the corporate veil because the courts will consider
ignoring the separate legal existance of the company and treat Lerato in her personal
capacity. Therefore, the court will assign Lerato the obligation to transfer the land despite it
being part of the company because this will be a specific performance required by the court.
The piercing the corporate veil will be done as the last resort however in this case Lerato
grossly misused the legal personality of the company she formed with her brother for an
unfair advantage for herself.
, Tutorial 2
23638877
Question 1:
1.1. D
1.2. C
Question 2:
A trust document has been created that specifies that trustee are required to notify the
founder as well as the beneficiaries of their resignation in writing. Since the trust has been
lodged with the master and the prescribed fee has been paid, a contract is formed between
them. Thus, the only way to resign is to do so in the way laid out in the trust document.
However, there is a loop hole that entitles Tetlanyo to resign as long as she gives notice to
the master. She did this via a telephone call on the 19th of February 2023, and therefore her
resignation is allowed due to the principle Ex Officio.
Question 3:
a. A trust is not a legal person therefore they cannot conclude a contract in its own
name. Contracts can be concluded by a trustee as long as they are acting as the
representative of the trust. Both A and X as the trustees their main purpose is to
carry on the business for the benefit of the beneficiaries defined. Therefore, A can
act as a representative of the trust and conclude a legally binding contract with
regards to the purchase of the land. A is under the impression that they can
conclude the contact as they are unaware that the trust instrument is not yet
finalized. Therefore the contract is valid as there is implied warranty.
b. Yes, the contract is valid as a person can be the founder, trustee and beneficiary of a
trust (parkers case). Therefore, the person has the contractual capacity to conclude a
valid contract.
23638877
Partnership
Busisiwe and Brent should adopt a Partnership. A partnership is an agreement between two
or more persons whereby both parties are willing to make contributions, which in this
scenario it is stated that they are both willing to contribute their personal assets. This is
beneficial as there will be a bigger drive to make profits as their own personal assets are on
the line.
Furthermore, a Partnership will be more beneficial to them as it does not have a Juristic
personality which means there are no strict laws governing the partnership which means
they can act as they want within the realms of the law. Moreover, with no juristic person
Busiswe and Brent will be the only ones involved in the managerial department which
means they can take control of their company to ensure the intention of making profits is
met.
Sole Proprietorship
This option would not be suitable as there are two persons – Busiswe and Brent.
Furthermore, the sole proprietorship has minimal financing options as there is only one
owner contributing to the business.
Close Corporations
The companies Act of 2008 bought an end to the close corporations nevertheless, this
would not be a suitable option in this scenario as they want to be the only two in control
however with a close corporation there can be 1 to 10 members and in every case each
member shares the percentage of interest and thereby shares the control.
Question 2:
Each member had to pay a joining fee of R5 000 which indicates they are bound to the
organization. Beauty for Men was established 2 years ago and the Companies act states
from s19 that “from the date and time that the incorporation of a company is registered, as
stated in its registration certificate the company is a juristic person.” A Juristic person is a
legal subject that is capable of having rights and obligations with the capability of owning
assets, concluding contracts and suing and being sued.
Beauty for Men concluded a contract with James and Mitch. Therefore, since Beauty for
Men is a juristic person they have a personal right against James and Mitch. James and
Mitch have been performing in improper conduct by taking clients for their own business
and not for that of the association. Therefore, Beauty for men can claim damages against
James and Mark for their improper behavior.
Furthermore, since Beauty for Men is a registered association they are therefore a juristic
personality and can have locust standi against James and Mitch.
,Question 3:
In this case there will be a Piercing of the corporate veil because the courts will consider
ignoring the separate legal existance of the company and treat Lerato in her personal
capacity. Therefore, the court will assign Lerato the obligation to transfer the land despite it
being part of the company because this will be a specific performance required by the court.
The piercing the corporate veil will be done as the last resort however in this case Lerato
grossly misused the legal personality of the company she formed with her brother for an
unfair advantage for herself.
, Tutorial 2
23638877
Question 1:
1.1. D
1.2. C
Question 2:
A trust document has been created that specifies that trustee are required to notify the
founder as well as the beneficiaries of their resignation in writing. Since the trust has been
lodged with the master and the prescribed fee has been paid, a contract is formed between
them. Thus, the only way to resign is to do so in the way laid out in the trust document.
However, there is a loop hole that entitles Tetlanyo to resign as long as she gives notice to
the master. She did this via a telephone call on the 19th of February 2023, and therefore her
resignation is allowed due to the principle Ex Officio.
Question 3:
a. A trust is not a legal person therefore they cannot conclude a contract in its own
name. Contracts can be concluded by a trustee as long as they are acting as the
representative of the trust. Both A and X as the trustees their main purpose is to
carry on the business for the benefit of the beneficiaries defined. Therefore, A can
act as a representative of the trust and conclude a legally binding contract with
regards to the purchase of the land. A is under the impression that they can
conclude the contact as they are unaware that the trust instrument is not yet
finalized. Therefore the contract is valid as there is implied warranty.
b. Yes, the contract is valid as a person can be the founder, trustee and beneficiary of a
trust (parkers case). Therefore, the person has the contractual capacity to conclude a
valid contract.
