This journal article welcomes students to the Commercial Law 1 module and introduces the topic of different business entities that entrepreneurs can use to start a business. It focuses on partnerships, explaining that a partnership requires an agreement between two or more parties to make a profit together, with partners jointly and severally liable for debts. Partnerships can be ordinary or extraordinary, with anonymous and en commandite partners having different liability. The article provides key points about partnerships and encourages students to fully study the source material for all relevant information.
This journal article welcomes students to the Commercial Law 1 module and introduces the topic of different business entities that entrepreneurs can use to start a business. It focuses on partnerships, explaining that a partnership requires an agreement between two or more parties to make a profit together, with partners jointly and severally liable for debts. Partnerships can be ordinary or extraordinary, with anonymous and en commandite partners having different liability. The article provides key points about partnerships and encourages students to fully study the source material for all relevant information.
This journal article welcomes students to the Commercial Law 1 module and introduces the topic of different business entities that entrepreneurs can use to start a business. It focuses on partnerships, explaining that a partnership requires an agreement between two or more parties to make a profit together, with partners jointly and severally liable for debts. Partnerships can be ordinary or extraordinary, with anonymous and en commandite partners having different liability. The article provides key points about partnerships and encourages students to fully study the source material for all relevant information.
Welcome Introduction to business entities Partnerships
Welcome to Commercial Law 1, second
semester (CLAW101/2Law101. In this module we are going to look at the various WELCOME types of business entities that an entrepreneur can choose from to start a business. We will, however, spend most of this semester on company law. As you know, South Africa is still in lockdown (at this stage in Level 1). As such, we will continue with online learning and assessment until the University Management indicates otherwise. Good luck with the semester! BUSINESS ENTITIES
This Learning Unit is self-study and will be assessed.
An entrepreneur can choose from the following business entities:
Sole proprietor Partnership Business trust Company Since 1 May 2011 no new close corporations can be registered. You need to know when a particular business entity is the most appropriate to choose. You also need to know the pros and cons of each business entity. In addition, you need to be able to contrast the various business entities. PARTNERSHIPS
A partnership is formed based on agreement between two or
more parties in terms of which each partner contributes money, skill or labour with the object of making a profit.
Please take note of the following:
There is NO limitation on the number of partners in a partnership. The biggest disadvantage of a partnership is that it has no legal personality, meaning that the partners are liable for the debts of the partnership. Amongst each other, partners are generally liable pro rata to each other, depending on their contribution, unless otherwise agreed. A partnership must ALWAYS have a profit objective and ALL the partners must shre in the profit of the partnership. Generally, partners are liable jointly and severally for the debts of the partnership. This means the creditor can claim the FULL amount of the debt from one of the partners and then the partner can claim from the other partners' pro rata payment from them. PARTNERSHIPS (CONTINUED)
Extra ordinary partnerships have two things in common:
The anonymous partner or the partner en commandite does not participate in the management of the partnership. This means that parties external to the partnership does not know about them. These partners are liable to the partners only and not to third parties, i.e. persons external to the partnership. Anonymous partners are liable to the other partners pro rata. Partners en commandite are liable to the other partners according to their contribution.
Please take note of the following (continued):
A partnership terminates in various ways. One of which is a change in the partners for whatsoever reason. Generally speaking, all partners may participate in the management of the partnership.
You CANNOT only study this
summary. This was prepared to assist you in respect of the most important information relating to partnerships.