SEMESTER 1/2026
ENTREPRENEURIAL LAW MRL2601
ASSIGNMENT QUESTIONS.
Question 1
1.1 Ben is a young aviation specialist who is passionate about aircraft and aviation law.
In his professional pursuits, he has decided to establish a company or form a
partnership with a colleague that would enhance the global aspect of aviation within the
area of corporate law. Ben decides to approach you for advice about a partnership and
a company. Advise Ben on the difference between a partnership and a company.
(10)
Question 2
2.1 Mandla approaches you for advice on the legal nature of a trust. Briefly explain to
Mandla the legal nature of a trust.
(5)
2.2 Mandla has decided to create a trust. Briefly explain to Tsepho the legal position of
a founder in a trust.
(5)
TOTAL: 20
MY RESPONSE.
Question 1. Partnership is a contractual legal relationship between two or more
individuals who has an agreement of carrying business together with the objective of
making profit. The individuals in partnership does not enjoy separate legal personality
as the partnership estate is not different from the estate of persons in partnership.
During the existence of the partnership, the partners are jointly and equality liable for
the debts, and severally liable upon dissolution or after. Partnership has minimal
formalities and flexible structures. However, they may dissolve if members change and
lack of perpetual succession. Change of members may be caused by death, insolvency
or retirement. This principle was confirmed in Sacks v Commissioner for inland
Revenue 1946 AD 31. Company is a juristic person according to Companies Act 71 of
2008 and they are required to register with the Companies and Intellectual Property
Commissioner (CICP). Companies are subject to more strict regulations, statutory
regulations and formal compliance. However, they enjoy perpetual succession and able
to raise capital through shares. After registering with the CIPC, the company gets
, separate legal personality, enjoys perpetual succession and the liability for shareholders
is limited, meaning that the company owns its assets, incurs liability which leaves the
shareholders’ assets protected. In cases where the company is indebted, it will be liable
for the debts. Types of companies includes private company Pty Ltd, public company
Ltd and none profit company NPC’s . If Ben chooses partnership: It will be easy to
establish, partners would be liable for debts including him, should one member
leaves/dies there will be no continuity of partnership. Suppose he chose Company: the
company will have legal personality and liable for its own debts. In addition, Ben’s
personal assets will be protected even in the event where a shareholder leaves/dies,
the company will continue to exist which will stabilise his long term aviation project. To
conclude, the difference is that partnership is an agreed contractual relationship for
business profit without legal personality, exposing the members to personal liability.
Whilst a company is a juristic person that has rights as a legal person with limited
liability to shareholders and perpetual succession. My advice would be that Ben choose
a company, given his professional ambitions in aviation law, a company will offer him
protection and continuity.
Question 2.1
Trust is a legal arrangements where a founder transfers property to trustees, who holds
and administers it for the benefit of beneficiaries. Trust’s are governed by the Trust
Property Control Act 57 of 1988. A trust does not have separate legal personality, trust
property is distinct from the personal estates of trustees. Trustees manage trust assets
in good faith, act in a fiduciary capacity, and it is in the best interests of beneficiaries. In
application to Mandla’s situation, if he creates a trust, the property will no longer belong
to him personally. Instead, trustees will administer it according to the trust deed. While
the trust itself is not a juristic person like a company, the law protects trust property by
separating it from the trustees’ personal assets. This ensures that beneficiaries’
interests are safeguarded. In conclusion, a trust is a legal relationship rather than a
separate legal entity. Although it lacks juristic personality, trust property is distinct from
the personal estates of trustees and must be administered for the benefit of the
beneficiaries.
Question 2.2.
The founder is the person who creates the trust by transferring property into it and
setting out the trust deed. Once the trust is established, the founder relinquishes
ownership of the property, which vests in the trustees. Trustees then become the legal
administrators of the property, bound by fiduciary duties. The founder cannot continue
to exercise ownership rights over trust property, as trustees must administer it
independently for beneficiaries. In application to Mandla’s situation, if he creates a trust,
ENTREPRENEURIAL LAW MRL2601
ASSIGNMENT QUESTIONS.
Question 1
1.1 Ben is a young aviation specialist who is passionate about aircraft and aviation law.
In his professional pursuits, he has decided to establish a company or form a
partnership with a colleague that would enhance the global aspect of aviation within the
area of corporate law. Ben decides to approach you for advice about a partnership and
a company. Advise Ben on the difference between a partnership and a company.
(10)
Question 2
2.1 Mandla approaches you for advice on the legal nature of a trust. Briefly explain to
Mandla the legal nature of a trust.
(5)
2.2 Mandla has decided to create a trust. Briefly explain to Tsepho the legal position of
a founder in a trust.
(5)
TOTAL: 20
MY RESPONSE.
Question 1. Partnership is a contractual legal relationship between two or more
individuals who has an agreement of carrying business together with the objective of
making profit. The individuals in partnership does not enjoy separate legal personality
as the partnership estate is not different from the estate of persons in partnership.
During the existence of the partnership, the partners are jointly and equality liable for
the debts, and severally liable upon dissolution or after. Partnership has minimal
formalities and flexible structures. However, they may dissolve if members change and
lack of perpetual succession. Change of members may be caused by death, insolvency
or retirement. This principle was confirmed in Sacks v Commissioner for inland
Revenue 1946 AD 31. Company is a juristic person according to Companies Act 71 of
2008 and they are required to register with the Companies and Intellectual Property
Commissioner (CICP). Companies are subject to more strict regulations, statutory
regulations and formal compliance. However, they enjoy perpetual succession and able
to raise capital through shares. After registering with the CIPC, the company gets
, separate legal personality, enjoys perpetual succession and the liability for shareholders
is limited, meaning that the company owns its assets, incurs liability which leaves the
shareholders’ assets protected. In cases where the company is indebted, it will be liable
for the debts. Types of companies includes private company Pty Ltd, public company
Ltd and none profit company NPC’s . If Ben chooses partnership: It will be easy to
establish, partners would be liable for debts including him, should one member
leaves/dies there will be no continuity of partnership. Suppose he chose Company: the
company will have legal personality and liable for its own debts. In addition, Ben’s
personal assets will be protected even in the event where a shareholder leaves/dies,
the company will continue to exist which will stabilise his long term aviation project. To
conclude, the difference is that partnership is an agreed contractual relationship for
business profit without legal personality, exposing the members to personal liability.
Whilst a company is a juristic person that has rights as a legal person with limited
liability to shareholders and perpetual succession. My advice would be that Ben choose
a company, given his professional ambitions in aviation law, a company will offer him
protection and continuity.
Question 2.1
Trust is a legal arrangements where a founder transfers property to trustees, who holds
and administers it for the benefit of beneficiaries. Trust’s are governed by the Trust
Property Control Act 57 of 1988. A trust does not have separate legal personality, trust
property is distinct from the personal estates of trustees. Trustees manage trust assets
in good faith, act in a fiduciary capacity, and it is in the best interests of beneficiaries. In
application to Mandla’s situation, if he creates a trust, the property will no longer belong
to him personally. Instead, trustees will administer it according to the trust deed. While
the trust itself is not a juristic person like a company, the law protects trust property by
separating it from the trustees’ personal assets. This ensures that beneficiaries’
interests are safeguarded. In conclusion, a trust is a legal relationship rather than a
separate legal entity. Although it lacks juristic personality, trust property is distinct from
the personal estates of trustees and must be administered for the benefit of the
beneficiaries.
Question 2.2.
The founder is the person who creates the trust by transferring property into it and
setting out the trust deed. Once the trust is established, the founder relinquishes
ownership of the property, which vests in the trustees. Trustees then become the legal
administrators of the property, bound by fiduciary duties. The founder cannot continue
to exercise ownership rights over trust property, as trustees must administer it
independently for beneficiaries. In application to Mandla’s situation, if he creates a trust,
