Although there is no legal limit on the number of partners, most businesses that are organized...
Although there is no legal limit on the number of partners, most businesses that are organized as a partnership are quite small (have few partners). Why would the legal definition of a partnership have a tendency to limit its size?
Homework Answers
So as to make decision-making much more easier, and to ensure that profits can be well split among partners in a large proportion
In this way, they limit the size of partners because:-
(i) Decision-making will be fast and easier because of the coordination of ideas and views from limited partners.
(ii) Profits can be shared in large proportions in limited partners, which then has high returns on investments.
(iii) There is more control and management of functions among limited partners than when the number is high.
(iv) Furthermore,power will be well distributed among partners, in relation to the functioning and delegation of activities.
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