MRL2601
ASSIGNMENT 1 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 2025
, Entrepreneurial Law
Question 1
Definition of Partnership
A partnership is defined as a contract between two or more persons who agree to carry
on a business in common with the objective of making a profit. Each partner contributes
something to the partnership — it can be money, goods, or services — and shares in
the profits and losses of the business (see Butters v Mncora 2012 (4) SA 1 (SCA)).
To determine whether a valid partnership exists between Themba, Ndumi, and Freddy,
we apply the essential elements of a partnership:
1. Each party must bring something into the partnership (contribution).
2. The partnership must be carried on for the joint benefit of the parties.
3. The object must be to make a profit.
4. The business must be conducted in common.
Analysis of Contributions:
Themba: He intends to contribute R25,000.00, but on the condition that if the
partnership fails, Ndumi and Freddy must reimburse him. This conditional
contribution is problematic. For a valid partnership, the contribution must be
unconditional. A loan (which this effectively is) is not a contribution to a
partnership. Therefore, Themba would not qualify as a partner unless he
removes the reimbursement condition.
Ndumi: He plans to contribute his expertise as an electrician. Contribution of skill
or labour is valid and common in partnerships. This satisfies the requirement of
contribution and intention to operate the business for profit.
Freddy: He offers the use of his Hilux pickup truck. This is considered a
contribution of a useful asset and is valid. However, if he only makes the truck
available without transferring ownership or formal usage rights to the partnership,
clarity must be obtained. Still, use of property can be a valid contribution.
ASSIGNMENT 1 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 2025
, Entrepreneurial Law
Question 1
Definition of Partnership
A partnership is defined as a contract between two or more persons who agree to carry
on a business in common with the objective of making a profit. Each partner contributes
something to the partnership — it can be money, goods, or services — and shares in
the profits and losses of the business (see Butters v Mncora 2012 (4) SA 1 (SCA)).
To determine whether a valid partnership exists between Themba, Ndumi, and Freddy,
we apply the essential elements of a partnership:
1. Each party must bring something into the partnership (contribution).
2. The partnership must be carried on for the joint benefit of the parties.
3. The object must be to make a profit.
4. The business must be conducted in common.
Analysis of Contributions:
Themba: He intends to contribute R25,000.00, but on the condition that if the
partnership fails, Ndumi and Freddy must reimburse him. This conditional
contribution is problematic. For a valid partnership, the contribution must be
unconditional. A loan (which this effectively is) is not a contribution to a
partnership. Therefore, Themba would not qualify as a partner unless he
removes the reimbursement condition.
Ndumi: He plans to contribute his expertise as an electrician. Contribution of skill
or labour is valid and common in partnerships. This satisfies the requirement of
contribution and intention to operate the business for profit.
Freddy: He offers the use of his Hilux pickup truck. This is considered a
contribution of a useful asset and is valid. However, if he only makes the truck
available without transferring ownership or formal usage rights to the partnership,
clarity must be obtained. Still, use of property can be a valid contribution.
