Universal Partnership is not a term everyone is familiar with, on the other hand it is something that has become increasingly common amongst partners.
What is a Universal Partnership?
It is an express or tacit agreement between two parties, including same sex couples, who choose to live together in a permanent relationship without marrying. They share the same responsibilities and obligations of a married couple, but the relationship is not regulated by the same laws as that of a married couple.
Generally speaking if you are not married to your partner you have no claim to your partner’s assets, and you have no claim to maintenance from him or her in the event the relationship fails.
There have been recent developments in case law in terms of which the South African Courts have recognised that a universal partnership may exist between the partners.
In order to determine whether a universal partnership exists, certain legal requirements must be satisfied, and these requirements are much the same as those for an ordinary business partnership. However, it must be noted that universal partnerships will differ from couple to couple and, importantly, not all contributions have to be financial in nature and there does not have to be a formal written agreement.
In Ponelat v Schrepfer 2012 (1) SA 206 (SCA) it was held that a universal partnership exists if the necessary requirements for its existence are met regardless of whether the parties are married, engaged or cohabitating.
The requirements for a universal partnership are as follows:
- that each of the partners contribute something to the partnership, whether it be financially, physically, time, energy, or skill;
- that the partnership should be carried on for the joint benefit of the parties; and
- the object is for each party to be enriched by the partnership.
The best way to regulate a Universal Partnership is for the parties to agree, in writing or otherwise, how to distribute all assets between them in the event the relationship dissolves. This does not necessarily mean that each party will keep what each brought into the relationship, and there exists the potential for your partner to share in the assets that have accumulated during the course of the relationship.
Accordingly, if you are in a long-term relationship and have chosen not to enter into a civil marriage or formally regulate your relationship, it is important to consider entering into an agreement to control and regulate what happens to your respective assets in the event that you and your partner decide to go seperate ways.
Written by Maya Narsai Makan on 8 June 2018
MAYA NARSAI MAKAN specializes in Divorce and Family Law Matters and is an associate at Alan Levy Attorneys Notaries and Conveyancers.