PARTNERSHIP AS FORM OF BUSINESS OWNERSHIP
Junior Secondary School
Business Studies JSS 1(Basic 7)
Second Term Lesson Notes
Subject :
Business Studies
Term :
SECOND TERM
Week:
Week 5
Class :
JSS 1
Topic :
PARTNERSHIP AS FORM OF BUSINESS OWNERSHIP
Previous lesson :
The pupils have previous knowledge of
SOLE TRADER OR PROPRIETOR AS FORM OF BUSINESS OWNERSHIP
that was taught as a topic during the last lesson.
Behavioural objectives :
At the end of the lesson, the pupils should be able to
- Say the meaning of partnership
- Explain how partnership is formed
- List types of business that can form partnership
- Write out the advantages and disadvantages of partnership business
Instructional Materials :
- Wall charts
- Pictures
- Related Online Video
- Flash Cards
Methods of Teaching :
- Class Discussion
- Group Discussion
- Asking Questions
- Explanation
- Role Modelling
- Role Delegation
Reference Materials :
- Scheme of Work
- Online Information
- Textbooks
- Workbooks
- 9 Year Basic Education Curriculum
- Workbooks
Content
Meaning of Partnership
A partnership is a business owned and managed by two or more persons who become partners by written agreement. The Partnership Act of 1890 and the companies Act of 1958 state that the maximum number of people who can form a Partnership is restricted to 20 persons while the minimum should be 2 persons. These partners share the profit or losses and the responsibilities of their business. Those in law and accounting professions are prohibited under the Companies Act of 1968 from forming partnerships. A document containing the written agreement, rights and obligations of the partners is called the deed of partnership.
Types of Partnership
There are various types of partnerships as stated below:
(a) Ordinary Partnership: This is a partnership in which all members are held liable for the debts of the business.
(b) Limited Partnership: This is a partnership with limited liability in that members will not be asked to contribute more money than the one used to start the business in case the business fails. For Partnership to become limited, it must be registered with the Registrar of Companies otherwise it will be treated as ordinary partnership.
(c) Active and Sleeping Partners: Partners who take part in running the business are active partners while those who do not take part in the running of the business are sleeping partners.
(d) Quasi or Nominal Partners: A nominal partner is a partner only in name. He contributes no capital and his name is only brought in to earn respectability and to bring goodwill to the business.
Advantages of Partnership
(i) It has more capital than sole trading.
(ii) Partners have different ability and talents therefore, each partner specializes in an aspect of business which he is best suited.
(iii) Partners meet to discuss matters relating to the firm.
(iv) There is usually more commitment to work.
(v) Profits are shared only by partners.
Disadvantages of Partnership
(i) Partners have unlimited liability for debts in case of business failure.
(ii) If one partner takes a wrong decision, it affects other partners.
(iii) Disagreement among partners causes confusion in the business.
(iv) Partnership comes to an end with the death or resignation of a partner.
(v) Decision is slower than with a sole proprietorship.
Presentation
The topic is presented step by step
Step 1:
The class teacher revises the previous topics
Step 2.
He introduces the new topic
Step 3:
The class teacher allows the pupils to give their own examples and he corrects them when the needs arise
EVALUATION
- What is Partnership?
- Outline two advantages and two disadvantages of Partnership.
- Define Partnership.
- Explain the following types of partnership: (a) Ordinary Partnership (b) Quasi Partnership.
Conclusion
The class teacher wraps up or conclude the lesson by giving out short note to summarize the topic that he or she has just taught.
The class teacher also goes round to make sure that the notes are well copied or well written by the pupils.
He or she does the necessary corrections when and where the needs arise.
