Anonymous Partnerships

26 Nov 2020 12:00 am

A partnership en commandite is carried on in the name of one or more partners, the other partner, whose name remains undisclosed, agreeing to contribute a fixed sum, on condition that he will receive a certain share of the profits, if any, but that in the event of loss he/she will not be liable for more than the fixed sum he has agreed to contribute as capital to the partnership (Lamb Bros v Brenner & Co (supra) at 161 and Butcher & Sons v Baranov Bros (1905) 26 NLR 589 at 592).

These two types of partnership are similar in the following respects (the term partner in each case comprehending anonymous and commanditarian partners):

The partner is undisclosed.

  • The partner is liable only to co-partners, and not creditors of the partnership. (Chapman v Gersigny (1882) 3 NLR 122). This is so even although a creditor is informed of the nature and terms of the partnership (Hall v Millin & Hutton 1915 SR 78; R v Siegel & Frenkel 1943 SR 13 at 15). Further, mere interference per se in the partnership business does not render the partner liable to third parties; to establish such liability, it must be proved that he/she held him/herself out publicly as a partner, or led third parties to believe that he/she was a partner by doing such acts as are done by a partner only (Watermeyer v Kerdel’s Trustees (1834) 3 M 424 at 436).
  • On the insolvency of the known partner, the partner cannot claim concurrently with the creditors of the partnership against the partnership: “… ‘n vennoot, en commandite of naamloos, [kan] nie in kompetisie met die krediteure van die vennootskap vir die terugbetaling van kapitale bydrae of profyte … eis nie. Hierdie stelling is gegrond op die beginsel dat daar die vennoot verantwoordelik is vir die vennootskapskulde, sodanige skuldeisers in werklikheid ook sy eie krediteure is, en hy kan nie toegelaat word nie om die vennootskap se bates te verminder tot die nadeel van diegene wat skuldeisers sowel van die vennootskap as van homself is nie.” (Venter v Naude NO 1951 (1) SA 156 (O) at 163).
  • A partner may not participate actively in the business of the partnership, and may not, while the partnership is still in existence, claim possession of assets of the business (Eaton & Louw v Arcade Properties (Pty) Ltd 1961 (4) SA 233 (T) at 239).

The important difference between an anonymous and a commanditarian partner is that the former is liable for his/her full share of the debts to the principal or known partner, who has lawfully contracted them, whereas the latter is liable to the known partner only to the extent of the amount of the capital contributed or agreed to be contributed by him. (Lamb Bros v Brenner & Co (1886) 5 EDC 152).

A partnership agreement will be construed in favour of it creating a general partnership, rather than an anonymous or commanditarian partnership (Butcher & Sons v Baranov Bros (1905) 26 NLR 589 at 593) but there seems no reason why the latter types cannot be constituted otherwise than by express agreement. All the circumstances must be examined to determine whether a partnership is general or not (see e g Sacca Ltd v Olivier 1954 (3) SA 136 (T) at 138). The fact that all the parties openly take part in the conduct of the partnership business is sufficient to disprove the existence of an anonymous or commanditarian partnership. In addition, it has been stated that a clause in a partnership agreement allowing each partner to draw cheques in the name of the partnership and another providing that no risks shall be undertaken on account of the partnership unless with the consent of the partners are completely inconsistent with the idea of a commanditarian or anonymous partnership (Barker & Co. v Blore (above)).

Clearly, the parties may agree at their discretion as to what share of profits and of losses the anonymous or commanditarian partner shall gain or bear (see Watermeyer v Kerdel’s Trustees (1834) 3 M 424).

It is not necessary, in an action brought by the partnership, to include in the summons the name of an anonymous partner (Lolly v Gilbert (1830) 1 M 434).

The question posed to the registrars at their annual conference was whether a vesting can disclose or refer to a commandite partner in deeds and documents. The Conference held that in terms of section 24bis read with regulation 34(1) of the Deeds Registries Act 47 of 1937, reference or disclosure to such a partner will not be allowed (RCR 22 of 2012).

However, in terms of RCR 5 of 2020, descriptions of the following are acceptable.

  1. Sabie Property Group Proprietary Limited
    Registration No. …………..) 
  2. Kuilsrivier Landgoed Proprietary Limited
    (Registration No. …………..) 

Trading in partnership under the name of HIBERRY ESTATE JOINT VENTURE 

Should you require more information in this regard, kindly contact me.

Allen West
Tonkin Clacey Pretoria
012 346 1278