Chapter 17 Flashcards
(11 cards)
What is the difference between a universal and particular partnership
1- Universal partnership involves partners contributing all their property or all their profits to the partnership for an open ended period with sharing of profits.
2- A particular partnership is more temporary and focused arrangement in which partners contribute their resources for a particular defined purpose only and share profits from the particular project.
What is the difference between an ordinary and extraordinary partnership
1- An ordinary partnership, partners are jointly and severally liable for all the debts of the partnership.
2- A extraordinary partnership the liability of certain partners is limited in a way.
There are three forms of extraordinary partnerships in which liability of certain of the partners to the third parties may be limited
1- A anonymous partnership
2- A partnership en commondite
3- A special partnership registered under special partnerships limited liability act
What is a Anonymous partnership
One in which two or more persons agree to share in some business which will be conducted by one of them in his own name and not in the name of the partnership. As long as the anonymous partner is not disclosed to the public, he is not liable to third parties for debts of the pattnership.
What is a partnership en commondite
Exists in cases where the business of the partnership is carried on in the name of one or more of the partners and every partner who’s name is disclosed makes a contribution in a form of fixed sum of money on condition that he receives a share of the profit.
What is the essentials of a partnership
1- Each of the partners must bring something into the partnership or bring something onto it like money or labour.
2- The business should be carried on for the joint benefit of the partners.
3- The objective should be to make a profit.
4- Contract between the partners should be legitimate.
Explain the legal nature of a partnership
South Africa has adopted the aggregate theory of partnerships as opposed to the entity theory. Entity theory views a partnership as an entity separate from its members so it becomes the bearer of rights and obligations and can continue existence.
The aggregate theory views a partnership as an aggregate collection of individual parties, being the partners. These partners are the owners of the partnership property, and the rights and liabilities of the partnership are said to be theirs.
Explain the relationship between the partners
1- Duty to accept and fulfill obligations of the partnership agreement.
2- Duty to acquire benefits for the partnership.
3- Duty to guard against a conflict of interest.
4- Duty of disclosure.
NB learn pg 379 and 380
What is the authority of partners to contract with third parties
According to the aggregate theory of partnerships, when a partner contracts on behalf of the partnership, the partner acts as a principle in relation to him, as a representative of the other partners yet he needs to still acts within the scope of his or her authority. As a principle, the partner is bound by his or her authorized actions and by the actions of the other partners when they act on behalf of the partnership within the limits of their authority.
Dissolution of a partnership
1- Effluxion of a period of time.
2- The end of an undertaking.
3- Mutual agreement between partners.
4- Change in membership of a partnership.
5- Insolvency of partnership or its members.
6- Notice of dissolution given by one of its members.
7- Order of court granted on application of one or more of the partners for good cause.
What are the different types of partnerships
1- A universal partnership
1- An ordinary partnership
