ARIA
THE LAW TUTOR
MRL2601
ENTREPRENEURIAL LAW
ASSIGNMENT 1 SEMESTER 1 2024
DUE DATE: 15 MARCH 2024
MEMORANDUM
, PLEASE TAKE NOTE THAT THE
CONTENTS HEREIN SHOULD BE
PARAPHRASED ACCORDINGLY TO
AVOID DICIPLINARY ACTIONS
AGAINST YOU.
PREVIEW OF QUESTIONS:
QUESTION 1
Sello, Thabelo and David want to start a partnership with the aim of selling Solar
batteries. Sello intends to contribute R25 000.00 on condition that should the
partnership fail, Thabelo and David will reimburse him. Thabelo intends to contribute
his expertise as an electrician. David intends to contribute the use of his Hilux pickup
truck. They come to you for advice on whether a partnership agreement will be valid
based on what each of them wants to contribute. Advise them fully. (In your advice,
define a partnership, deal with each contribution and conclude.) (10)
Question 2
2.1 Paul is a trustee of a business involved in the retail of computer equipment.
Although the trust deed makes no provision for it Paul buys a delivery vehicle to
transport the computer equipment.
2.1.1 Given the requirement that a trustee must preserve trust assets, indicate whether
Paul has acted lawfully. (5)
2.1.2 Explain to Paul what his other duties as trustee are by listing five of the other
duties of a trustee. (5)
ANSWERS:
QUESTION 1:
A partnership, as defined by the Partnership Act, is the relation which subsists between
persons carrying on a business in common with a view of profit. It involves the sharing of
profits and losses, joint ownership of the business, and an equal right in the management of
the business.
Sello’s contribution of R25,000.00 is a standard financial contribution to the partnership.
However, his condition for reimbursement in case of failure is contrary to the inherent risk-
sharing nature of a partnership. In a partnership, all partners are jointly and severally liable
for the debts of the partnership. Therefore, Sello’s condition may not be enforceable and he
should be prepared to share in the losses, if any.
THE LAW TUTOR
MRL2601
ENTREPRENEURIAL LAW
ASSIGNMENT 1 SEMESTER 1 2024
DUE DATE: 15 MARCH 2024
MEMORANDUM
, PLEASE TAKE NOTE THAT THE
CONTENTS HEREIN SHOULD BE
PARAPHRASED ACCORDINGLY TO
AVOID DICIPLINARY ACTIONS
AGAINST YOU.
PREVIEW OF QUESTIONS:
QUESTION 1
Sello, Thabelo and David want to start a partnership with the aim of selling Solar
batteries. Sello intends to contribute R25 000.00 on condition that should the
partnership fail, Thabelo and David will reimburse him. Thabelo intends to contribute
his expertise as an electrician. David intends to contribute the use of his Hilux pickup
truck. They come to you for advice on whether a partnership agreement will be valid
based on what each of them wants to contribute. Advise them fully. (In your advice,
define a partnership, deal with each contribution and conclude.) (10)
Question 2
2.1 Paul is a trustee of a business involved in the retail of computer equipment.
Although the trust deed makes no provision for it Paul buys a delivery vehicle to
transport the computer equipment.
2.1.1 Given the requirement that a trustee must preserve trust assets, indicate whether
Paul has acted lawfully. (5)
2.1.2 Explain to Paul what his other duties as trustee are by listing five of the other
duties of a trustee. (5)
ANSWERS:
QUESTION 1:
A partnership, as defined by the Partnership Act, is the relation which subsists between
persons carrying on a business in common with a view of profit. It involves the sharing of
profits and losses, joint ownership of the business, and an equal right in the management of
the business.
Sello’s contribution of R25,000.00 is a standard financial contribution to the partnership.
However, his condition for reimbursement in case of failure is contrary to the inherent risk-
sharing nature of a partnership. In a partnership, all partners are jointly and severally liable
for the debts of the partnership. Therefore, Sello’s condition may not be enforceable and he
should be prepared to share in the losses, if any.
