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According to South African law partnerships are not regarded as legal persons such as for example a Company.
Therefore no specific codes of conduct is prescribed or regulated by law for partnerships and the partners have to agree amongst themselves what their relationship will entail, who carries which responsibilities and what the financial implications amongst themselves will be.
Some partners may be silent partners (someone who contributes financially but is not involved in the management of the partnership, although the name of the silent partner is made public), anonymous partners (someone who contributes financially but not involved in management and whose name is not made public), limited partners (contributes financially but is only liable for partnership expenses to the extent of his financial contributions).
All these partners receive profits from the partnership to a certain extent which share must be agreed upon amongst the partners.
The Partnership Agreement does not have to be in writing but it is clearly in the best interest of the partners and other people or institutions dealing with the partnership that arrangements should be stipulated in a written document.
Standard aspects which we consider in drafting the partnership are: The nature of the business activities; The address from where business will be conducted; The formation date as well as the estimated duration of the partnership; The contributions of each partner; Arrangements with regards to how profits and losses will be appropriated; Arrangements regarding drawings by partners as well as the interest to be charged on these amounts; Stipulating whether the partners earn interest on capital and the rate; Agreements as to whether partners working in the partnership earn salaries or drawings. Procedures regarding disputes; Termination of Partnership procedures.
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