Viru, Nana and Timothy formed an ordinary partnership under the Partnership Act 1957 to sell sports goods. The partnership was duly registered as required by law. The partnership deed clearly stipulated that the sole purpose of the partnership is selling only sports goods and nothing else. The partnership set up an attractive shop and began selling sports goods. Each of the partners paid R100,000 into the business.Nana told the other two partners that he did not have more money and it was agreed between them that Nana’s maximum liability for any partnership debt would be fixed at his original contribution of R100,000 only. In January 2010, Viru drew R10,000 from the partnership’s bank, drawn on its overdraft facility, by misrepresenting that the money was urgently needed to finance a short-term partnership debt, and then used the money to pay for a holiday in South Africa.In February 2010, Timothy entered into a R25,000 contract on behalf of the partnership to buy hair relaxers, which he hoped to sell in the partnership’s sports goods shop.Required:Advise Viru, Nana and Timothy as to their various rights and liabilities in relation to the operation of the partnership business. (10 marks)
