A partnership is a business owned by at least 2 partners. The partner can be an individual, a company or a limited liability partnership. The maximum number of partners in a general partnership is 20.
However, this maximum number of partners does not apply to
professional partnerships which are formed for the purpose of carrying on any profession which may be exercised only by persons who possess the qualifications laid down in written law for the purpose of carrying on that profession. These professional partnerships can have more than 20 partners. Examples of such professional firms include engineers registered under Professional Engineers Act, lawyers registered under the Legal Profession Act and architects registered under the Architects Act. Such professional firms may also choose to register their professional partnership under the Limited Liability Partnerships Act.
The legal status of a partnership can be defined as follows:
- It is not a separate legal entity from the business owners
- The partners are personally liable for all the debts and losses of the partnership
- It can sue or be sued in the partners’ names