FBE2604
ASSIGNMENT 1 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 2025
, Assignment 01:
1.1 Differences between a Partnership and a Company
A partnership is a contractual relationship between two or more persons who agree to
carry on a business together and share in its profits and losses. A company, on the
other hand, is a separate legal entity incorporated in terms of the Companies Act 71 of
2008. The main differences are:
1. Legal personality – A company has separate legal personality from its owners
(shareholders), whereas a partnership has no separate personality; the partners
and the partnership are the same in law.
2. Liability – In a partnership, partners have unlimited personal liability for the
debts of the partnership. In a company (especially a private limited company),
shareholders have limited liability, meaning they are only liable up to the value of
their shareholding.
3. Continuity – A company enjoys perpetual succession; it continues to exist
despite changes in ownership or death of shareholders. A partnership generally
dissolves when a partner leaves or dies, unless otherwise agreed.
4. Formation – A partnership is formed by agreement between parties and does
not require registration (except in some regulated professions). A company must
be registered with the Companies and Intellectual Property Commission (CIPC)
and comply with statutory requirements.
5. Management – In a partnership, all partners may participate in management
unless agreed otherwise. In a company, directors manage the company, while
shareholders have an ownership role.
6. Number of participants – A partnership requires a minimum of two partners (no
statutory maximum in South Africa, except for certain professions). A private
company may have one or more shareholders.
ASSIGNMENT 1 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 2025
, Assignment 01:
1.1 Differences between a Partnership and a Company
A partnership is a contractual relationship between two or more persons who agree to
carry on a business together and share in its profits and losses. A company, on the
other hand, is a separate legal entity incorporated in terms of the Companies Act 71 of
2008. The main differences are:
1. Legal personality – A company has separate legal personality from its owners
(shareholders), whereas a partnership has no separate personality; the partners
and the partnership are the same in law.
2. Liability – In a partnership, partners have unlimited personal liability for the
debts of the partnership. In a company (especially a private limited company),
shareholders have limited liability, meaning they are only liable up to the value of
their shareholding.
3. Continuity – A company enjoys perpetual succession; it continues to exist
despite changes in ownership or death of shareholders. A partnership generally
dissolves when a partner leaves or dies, unless otherwise agreed.
4. Formation – A partnership is formed by agreement between parties and does
not require registration (except in some regulated professions). A company must
be registered with the Companies and Intellectual Property Commission (CIPC)
and comply with statutory requirements.
5. Management – In a partnership, all partners may participate in management
unless agreed otherwise. In a company, directors manage the company, while
shareholders have an ownership role.
6. Number of participants – A partnership requires a minimum of two partners (no
statutory maximum in South Africa, except for certain professions). A private
company may have one or more shareholders.
