The Trader

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The Trader

Definition of a Trader

Section 4 of the Commercial Code –

The term "trader" means any person who, by profession, exercises acts of trade in his own name, and includes any commercial partnership.

The fact that a person is considered to be trader has certain consequences and brings about certain rights and obligations.

The requirements for becoming a trader:

1. No formality such as registration.
A commercial partnership requires registration.

Break down of section 4
2. exercise of acts of trade.
-The law requires the exercise of objective acts of trade.
- There must be a certain continuity in the exercise of these acts of trade. Therefore a one off transaction does not give a person the status of a trader. - There is no fixed number of acts of trade which give a status of trader, it all depends on the nature of the act of trade in question, e.g. a person who deals in property may have the status of a trader even if he performs two or three acts of trade a year, but if a green grocer performs two or three transactions per year – he will hardly be considered to be a trader. - The Court will decide if there is sufficient exercise of acts of trade to allow status of trade. - The trader need not perform the acts of trade personally, he may perform the through an agent. – WHAT IS IMP IS THAT THE ACTS OF TRADE ARE EXERCISED IN HIS OWN NAME. - VIP the exercise of acts of trade must be performed with the intention of speculation – “FINIS MERCATORUM LUCRUM EST”.

3. Acts of trade must be exercised in his own name.

* Vis a vis third parties the trader must assume full responsibility for the acts performed by him. * distinction between trader and persons auxiliary to trade. Agent, director, manager, the commercial traveler, the master of a ship, the curator of a minor are not traders.

4. The exercise of acts of trade must be done by profession. * The law is not satisfied with a repetition of the acts of trade, but it wants the exercise of the acts of trade to be the object of one’s continued activity. Therefore the performance of acts of trade must be the person’s only, or at least primary and constant source of income. An employee who does a few transactions annually, does not become a trader. * Dr Edward Amato vs Spiro Xuereb Vol. XXII, Pt III, p. 204. – In order that a person becomes a trader he must devote his services to trade in such a way that it becomes his only or his principal occupation. * The notoriety of the exercise of the acts of trade is not necessary. Infact the source of our Commercial Code – The French Commercial Code, speaks of definition of a trader as “a person who notoriously exercises acts of trade as his principal profession”, while our legislator left the element of notoriety out completely.

5. The question whether a person is or is not a trader is a matter of fact, and the person alleging it must prove it – “Onus probandi incumbit ei qui dicit, non ei qui negat”.

Commercial Partnerships

Commercial partnerships: three types

Regulated by Chapter 386 Companies Act.

From moment of issue of certificate of registration you have a trader.

Professions incompatible with status of trader

Broker cannot
transact business
for his own
account, etc.
88. No public broker shall transact any commercial business for his own account, or have any interest therein, either directly or indirectly, in his own name or through the medium of a third party, whether alone or in partnership with others; nor shall any public broker lend his name for any transaction whatsoever to any person not authorized to exercise the office of a public broker: Provided that two or more public brokers may form a partnership between them for the purpose of brokerage only.


Sec. 3 (1) Notarial Profession and Archives Act
3. (1) No person holding the warrant of advocate or legal procurator or being a bank...
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