Question

Breif information regarding "partnership final account"

Answer 1

1.0 INTRODUCTION

The law governing partnership, which is guided by the partnership Act of 1890, in Nigeria defined partnership as “the relation which subsists between persons carrying on a business in common with the view of profit”. The number of persons, termed partners, who may form a partnership, is limited
to 20 except (a) in the case of: (i) Solicitors; (ii)Accountants iii) Members of a recognized Stock Exchange, and (b) in the case of banking business where the limit is ten (10) except that the number may go up to 20 if each partner has bound of trade authorization.

This Unit discusses types of partners that could be found in partnership arrangements, partnership deeds, liabilities of partners, and advantages of partnership, types of partnership and partnership accounts to be maintained by a serious partnership business. 

2.0 OBJECTIVES

At the end of this unit, you should be able to:

appreciate types of partners and partnership understand the likely contents of the partnership deeds appreciate the liabilities that attributable to partners in a partnership business understand the advantages of partnership over sole proprietorship business learn about the types of accounts to be kept by a partnership business. 

3.0 MAIN CONTENT

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This is a partner who has capital in the business and takes part in conducting the affairs of the business. 

3.1.1.2 Sleeping (or Dormant) Partners

This is a partner who has capital in the firm (business). Such a Partner is responsible for the debts of the firm as if he were an ordinary partner. His name may or may not appear in the firm’s name. 

3.1.1.3 Nominal (Apparent or Quasi) Partner

This is a person who whilst not a partner in a partnership business, lends his name to the business. Such a person is said to be holding out as a partner and is therefore liable as a partner for credit given to the firm, on the assumption that he was actually a member of the firm.