CLA2601 Assignment 1 (COMPLETE ANSWERS) Semester 1 2025 (770912) - DUE 7 April 2025

, CLA2601 Assignment 1 (COMPLETE ANSWERS)
Semester 1 2025 (770912) - DUE 7 April 2025; 100%
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Question 1

Zane, Bongi, Muthu and Sophy are friends who decide to form a
partnership to purchase and sell new and secondhand mobile
phones. Sophy and Bongi will provide the capital to purchase the
initial stock for the partnership. Zane will be responsible for the
repair of mobile phones and Muthu will be responsible for the
day-to-day activities regarding the sales, administration and
marketing of the mobile phone business. The parties agree that
the profit derived from the partnership will be divided equally
between Bongi, Sophy and Zane, and that Muthu will receive a
monthly salary for his services. Discuss and explain whether the
above terms constitute a valid partnership agreement. Refer to
relevant case law in your answer. 10 marks

Definition of a Partnership

A partnership in South African law is defined as:

"The relationship which exists between persons who carry on a business
in common with the object of making a profit."
This definition was affirmed in Purdon v Muller 1961 (2) SA 211 (A).