Written by: Ayanda Tshabalala
Date: 8 June 2025
What Is A Universal Partnership?
In an era where societal norms are evolving, marriage is not the preferred choice for everyone, nor is it in everyone’s future plans. Couples who prefer not to enter into a legally recognised marriage have other alternatives available to them. Some choose to live together, build a life, and acquire assets as committed partners. These couples, like anyone else, can use legal mechanisms to safeguard their relationships and financial interests. A universal partnership is one of the available options, as it affords couples a legal structure that allows them to establish the terms and obligations of their relationship.
A universal partnership is a legally recognised long-term relationship between two parties who usually cohabit, share resources and contribute towards a joint endeavour. It is an option available for individuals who do not wish to enter into a formal marriage but wish to protect their joint property or business venture as life partners.
What Types Of Universal Partnerships Exist In South African Law?
The South African law recognises two types of universal partnerships, namely Societas universorum bonorum and Societas universorum quae ex quaestu veniunt.
- Societas universorum bonorum: Where the parties agree to contribute all their property, including both future and present assets, liabilities, profits and losses, into the partnership.
- Societas universorum quae ex quaestu veniunt: Where the parties agree that all future and present assets, liabilities, profits and losses that they may acquire from a commercial undertaking shall be partnership property.
What Are The Requirements Of Entering Into A Universal Partnership?
The partners must contribute towards the universal partnership with an aim to mutually benefit. The contributions do not have to be financial and may include domestic responsibilities.
A universal partnership is a contract, and the requirements are therefore the same as those of a valid contract, namely:
- Both parties must have the legal capacity to enter into such a contract.
- The parties must be in agreement on the contract and its terms.
- The formalities of a contract must be satisfied.
- There must be a serious intention to create legally binding obligations from both parties.
- The contract must be lawful, and it cannot contain provisions or clauses
- that are prohibited by the law or the legal convictions of the community.
Do I Need To Have A Business With My Partner For Us To Enter Into A Universal Partnership?
No, you do not. The contributions of both parties are not solely limited to profit-generating activities. The parties can also contribute through other means, such as domestic responsibilities.
Does The Universal Partnership Have To Be In Writing?
No, a universal partnership does not have to be expressed or in writing. It can be implied through the conduct of the parties, but the burden of proof lies with the claimant, as tacit agreements require supporting evidence. It was held in the Butters v. Mncora case that tacit universal partnerships are recognized in South African law, particularly in situations where the property and business activities of unmarried parties who have chosen to live together are intended to generate profit. It can be implied that the parties agreed to share.
What Are The Benefits Of Universal Partnerships?
Universal partnerships can be dissolved without a dDecree of divorce from the court and do not require solemnisation or registration. Parties may duly benefit from their long-term relationships and any commercial activities they may elect to undertake as a couple.
What Are The Disadvantages Of A Universal Partnership?
Certain assets, such as pension funds, cannot be shared under a universal partnership, and it may be challenging to prove the existence of a tacit universal partnership.
When Will A Universal Partnership Exist?
According to the court in the case of Pezzutto v Dreyers & others 1992 (3) SA 379 (A), a universal partnership will exist if the following essentials are present:
- Each of the parties brings something into the relationship
- The partnership is carried on for the joint benefit of the parties.
- The object of the partnership should be to make a profit; however, in a cohabitation relationship, a pecuniary motive is not required. The achievement of another material gain, such as joint exercise for the purpose of saving costs, will suffice.
- The contract should be a legitimate contract.
In cohabitation relationships, a purely financial motive is not required — shared effort toward a mutual goal may suffice.
Why Do People Enter Into Universal Partnerships?
There are often a multitude of problems that arise upon the termination of long-term relationships where parties have lived together as husband and wife, especially pertaining to the division of assets.
The Domestic Partnership Bill No. 36 of 2008 is still in draft form, and cohabitees in relationships are presently afforded minimum legal protection and are therefore advised to draft a cohabitation agreement to regulate the terms of their cohabitation.
This agreement canwill determine the division of their property on termination of the relationship, as well as the division of the assets jointly acquired by the parties during cohabitation, and assist parties to navigate the division of the estate..
Are Universal Partnerships Only For Unmarried People?
No, spouses who are married (irrespective of the regime)in community of property may enter into a universal partnership to regulate certain assets, such as businesses.. As illustrated in Muhlmann v Muhlmann, wherein a partnership was recognised based on the parties’ joint contribution and their shared assets.
Universal partnerships offer parties the autonomy to regulate their relationships without getting married, while ensuring that their contributions and expectations are clearly stated in the agreement. It is advisable to have a written agreement of the universal partnership because it is a tedious process to prove a tacit partnership, especially when the relationship ends acrimoniously.
Universal partnerships provide a valuable legal framework for couples who choose not to marry but wish to protect their joint interests and ensure fairness should their relationship end. These agreements recognise both financial and non-financial contributions, giving unmarried partners a measure of legal protection that would otherwise not exist.
If you are in a long-term relationship, without the intention of getting married, and want to protect your assets, it is essential to seek legal guidance on drafting a valid universal partnership or cohabitation agreement.
At Burger Huyser Attorneys, our family law specialists provide essential family law support to assist you in formalising your partnership, protecting your rights, and ensuring that your contributions are recognised under South African law. Contact us today for professional advice on how to safeguard your financial and personal interests.
Contact Burger Huyser Attorneys, and book a consultation.
To speak to one of our experienced attorneys in South Africa for immediate assistance, contact us on the numbers below:
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