Mpho and Thabo need a business vehicle denoted as a juristic person which is in form of a business entity.
The most favourable business vehicle for Mpho and Thabo would be a company, a private company in particular. A private company is a separate legal entity and has a separate life form from its owners and is required by the Companies Act of 2008, no. 71 to perform rights and duties of its own. A private company can be difficult and costly to establish and is subjected to a lot of legal requirements but on the other hand the life span is perpetual, there is an ease when it comes to transfer of ownership, it is very efficient to manage and makes it easier to raising capital.
Another option would have been a close corporation (CC)…show more content… A Pupillus has limited contractual capacity.
Mpho and Thabo should consider looking in to the Consumers Protection Act 2008, Section 39 which highlights agreements with persons lacking legal capacity, it states that, the agreement is voidable at the option of the consumer if the agreement was made without the consent of an adult responsible for that minor.
Mpho and Thabo need to take in to account that when selling the merchandise to the pupillus, they can engage in to a contract but a legal guardian has to consent to the contract in order for it to be binding, the consent can either be expressed or implied other than that the contract is considered to be a limping contract, in comparison to a case such as Groenwald v Rex which claims there was no approved consent given to pupillus to enter in to a contract.
Therefore the contract that is limping and made without consent is not bound to the minor and it is considered void while Mpho and Thabo would in this case still be bound to that contract and the minor has an option to either Ratify the contract, choose to enforce the contract or repudiate , choose not to enforce the