A partnership exists when two to twenty (2 – 20) people, having similar economic interests, come together to set up a business purposely to make profit, e.g. Akintola Williams & Co.
Features of a Partnership
- Its membership ranges from a minimum of two to a maximum of twenty people.
- All the partners collectively own the business. They set out rules to govern the business and to define each partner’s rights and obligations.
- A partner could be either a dormant or an active partner. A dormant partner only provides capital and shares in profits and losses but does not participate in the running of the business, while an active partner provides capital and takes part in the day to day running of the business.
- The risks of the business are jointly borne by all the partners.
- The liability of all partners is unlimited.