Partnerships In Zimbabwe – Marume and Furidzo Legal Practitioners

A partnership is an agreement between two to twenty people in which the parties agree to contribute money, labour or skill to a common stock and carry on business with the object of making profit. There is an exception where a partnership can have more than twenty partners and this applies to professionals like lawyers and accountants.

In terms of the Companies and Other Business Entities Act (Chapter 24:31) it is not mandatory to register a partnership although one may register it if they so wish. This is primarily because a partnership, unlike a company or a private business corporation, is not a separate legal person. Thus section 278 (2) of the Act provides as follows;

(2) The authorised representative of any partnership, syndicate, consortium, joint venture or unregistered association, may, on payment of the prescribed fee and in the prescribed manner register a copy of the constitutive document relating to the entity in question, and thereupon the document lodged in the Registry shall be deemed for all purposes to be the authentic record of such document.

As mentioned above, a partnership is not a separate legal person and in this sense is similar to a joint venture (unless a joint venture company is registered). Parties may therefore enter into a partnership orally but it is advisable to reduce the agreement to writing. The written document is called the partnership deed and is the constitutive document referred to by the Act. The partnership deed is one of the documents that banks require for the opening of bank accounts.

Commenting on the need to reduce a partnership agreement into writing, the court in Manyara v Muzanenhamo (HH412/15) had this to say;

“Although a business partnership can be oral or by conduct clearly the presence of a written agreement which details the agreed parameters of the partnership has the advantage of avoiding problems such as in this case, of the difficulty of proving the existence of the partnership in the first place. In casu there was no written agreement with the plaintiff relying on what he variously termed as a “form of understanding” or a “trial agreement” to found his claim.”

The most important aspects to be covered by the partnership deed are the contribution by each partner which may be in the form of capital, labour or skill and the object of making profit to be divided among the partners in an agreed ratio. Accordingly, where the aim is not to make profit for the joint benefit of the partners, it cannot be called a partnership.

A partnership can be terminated in various ways and one common way is the unilateral act of one partner. Thus, one partner may simply give a notice of withdrawal from the partnership but this may be a breach of the agreement and the said partner will be liable to damages.

The contents of this article are for general information purposes only and do not constitute our legal or professional advice. We accept no responsibility for any loss or damage of whatsoever nature which may arise from reliance on any of the information published herein.

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