Examples Of Universal Partnership

Universal Partnerships as a remedy.

A partnership is defined as a legal relationship created by way of a contract between two or more persons, but not more than twenty, in terms of which each of the partners agree to contribute to the partnership business, which is carried out for the joint benefit of the parties, with the objection to make a profit. This explanation of a partnership is briefly noted in two cases; Pezzutto v Dreyer and Adcock v Adcock.

The ‘contribution’ by each parties do not necessarily have to be financial in nature. As long as the contribution is used for the business to generate profit for the exclusive benefit of the partners. A relationship where individuals behave as a married couple in all material aspects without

Therefore, the principle of a universal relationship serves as a remedy by affording cohabitees an opportunity to recover a share of the assets that were acquired during cohabitation.

Cohabitation is not recognised in South African law. Therefore, the parties to a universal partnership do not benefit automatic rights as opposed to parties to a civil union or civil marriage. If a cohabitant died without a valid will, their surviving partner will not be able to inherit a deceased’s estate in terms of The Intestate Succession Act and he/she will not be legally entitled to claim maintenance from the Maintenance of Surviving Spouses Act.

Even though our law does not provide protection for parties in situations where there is no bona fide contract between the parties, there are legal remedies available, provided that the aggrieved party is able to prove that a universal partnership existed, which is usually a very lengthy and expensive process. To protect a partner in a universal relationship, a codified contract should be

A partner may not use these assets as an item of self-salvation or alienate these assets without the prior consent of the other partner.

A universal partnership can be terminated by agreement, insolvency of one of the partners or by death of one of the partners. Once the partnership has dissolved, the partnership assets are distributed between the partners and are not necessarily in equal shares. The distribution depends on how much each partner has actually contributed as capital for the business or it simply depends on the agreement made.

Upon termination of the partnership, pension assets of the partners cannot be shared between them, irrespective of whether they can prove a universal partnership existed between them or not. The reason for this is that a universal partnership is not a marriage and the Pension Fund Act makes a specific reference to a “divorce”. Since the partnership is not a marriage, it cannot be terminated by way of a