SS1 Third Term Commerce Lesson Note – Partnership

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WEEK 3

TOPIC: PARTNERSHIP

CONTENT:

• Meaning of Partnership
• Types of partnership – normal, dormant, limited, etc.
• Formulation and agreement.

SUB-TOPIC 1: MEANING OF PARTNERSHIP

Partnership is an association between a minimum of two and maximum of twenty members coming together to undertake a/some businesses) in order to make profit. The partnership Act 1890   defined partnership as the relationship which subsists between persons carrying on a business in common with a view of profit. Partnerships are also known as firms. The law allows this type of business to have between two and 20 persons as members although there are exceptions. A bank is not allowed to have more than ten partners and certain professional firms such as accountants, solicitors and stockbrokers are allowed to have more than 20 partners. Examples are Femi and Shade Enterprises, Diya Fatimilehin and Co; (estate firm).

FEATURES OR CHARACTERISTICS OF PARTNERSHIP

1. Ownership: Membership is limited and is from two to twenty.
2. Objective: The main aim of forming this type of business organization is to make profit.
3. Source of capital: The partners contribute the capital required for starting and running the business.
4. Unlimited Liability: Members of a partnership have unlimited liability for the debts of the firm.
5. Life span: The duration of the business depends on the agreement signed by the partners involved.
6. Legal entity: It is not a legal entity as the partners are not separated from the business.
7. Management: The business is controlled and managed by the partners.

SUB-TOPIC 2: TYPES OF PARTNERSHIP

1. Limited Partnership:

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