South Africa
Partnership Agreement
R999
Create a clear partnership agreement that records each partner’s contributions, profit-sharing, responsibilities, decision-making powers, banking arrangements, dispute resolution process, and exit terms.
A Partnership Agreement is used where two or more people or entities agree to carry on a business, trade, profession, or project together with the intention of sharing profits and losses. It records how the partnership will operate, what each partner must contribute, how decisions will be made, how profits and losses will be divided, and what happens when a partner exits or the partnership ends. It is suitable for small businesses, professional practices, family businesses, joint ventures, and informal business arrangements that need formal rules.
South African legal context (2026 checklist)
In South Africa, a partnership is generally not a separate legal person like a company. It is a contractual and common-law relationship between the partners. This means the agreement should clearly regulate authority, liability, contributions, profit-sharing, tax responsibilities, bank mandates, record keeping, and exit arrangements. Partners should understand that they may be personally exposed to partnership debts and obligations, depending on the structure and facts. The agreement should also deal with what happens if trust breaks down, because disputes between partners can quickly affect the business.
- South African common law of partnership
- Law of contract
- Income Tax Act 58 of 1962, including section 24H where applicable to partnership income and allowances
- Value-Added Tax Act 89 of 1991, where the partnership is required to register for VAT
- Tax Administration Act 28 of 2011
- Protection of Personal Information Act 4 of 2013, where personal information of partners, employees, customers, or suppliers is processed
- Consumer Protection Act 68 of 2008, where the partnership supplies goods or services to consumers
- National Credit Act 34 of 2005, where the partnership provides credit or loans regulated by the Act
- Prescription Act 68 of 1969
- Arbitration Act 42 of 1965, where the agreement provides for arbitration
- Insolvency Act 24 of 1936, where a partner or the partnership estate becomes insolvent
Use this as a starting point only. Verify current gazetted amendments, tribunal rules, and SARS / DOL circulars that may apply to your matter.
Typical questions we'll walk you through
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What is the name of the partnership or business?
Who are the partners and what are their full details?
What business, trade, profession, or project will the partnership conduct?
What is the partnership’s physical and trading address?
When will the partnership start?
Will the partnership continue indefinitely or for a fixed period?
What money, assets, equipment, labour, skills, or intellectual property will each partner contribute?
What percentage interest will each partner hold?
How will profits and losses be shared?
Who will manage the day-to-day business?
What decisions require unanimous consent or majority approval?
Who may sign contracts or incur debts on behalf of the partnership?
What banking arrangements will apply?
Will partners be allowed to draw salaries, drawings, allowances, or reimbursements?
How will accounting records, tax records, invoices, and financial statements be handled?
Can a partner conduct competing business outside the partnership?
Will confidentiality, restraint of trade, or non-solicitation obligations apply?
What happens if a partner wants to resign, retire, sell their interest, or exit?
What happens if a partner dies, becomes insolvent, disabled, or breaches the agreement?
How will the value of a partner’s interest be calculated on exit?
How will disputes be resolved: negotiation, mediation, arbitration, or court?
What process will apply if the partnership is dissolved?
Who will keep the partnership records and documents?
Who will sign the agreement?
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