PARTNERSHIP IN BUSINESS AND ITS CHALLENGES(A CASE STUDY OF NDDC)

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Generally when a proprietor finds it’s difficult to handle the problems of expansion, he thinks of taking a partner. In other words, once a business grows beyond the capacity of a sole proprietorship  and  or  a  Joint  Hindu  Family,  it  becomes  unarguably  necessary  to  form partnership. It means that partnership grows out of the limitations of one‐man business in terms of limited financial resources, limited managerial ability and unlimited risk. Partnership represents the second stage in the evolution of ownership forms.

In simple words, a Partnership is an association of two or more individuals who agree to carry on business together for the purpose of earning and sharing of profits.  However a formal definition is provided by the Partnership Act of 1932.

According to Banaji (2007) a partnership is an arrangement where parties, known as partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations.

A partnership is an arrangement where parties, known as partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations may partner together to increase the likelihood of each achieving their mission and to amplify their reach. A partnership may result in issuing and holding equity or may be only governed by a contract. According to Njoku C.V and Nwosu A.N (2010), Partnership is a form of business in which two or more persons share ownership. It is a legal association of two or more persons as co-owners of a business for profit. The Company and Allied Matters Act, (CAMA) 1990, stipulates that membership in a partnership is between two and twenty. However this restriction does not apply to legal practitioners and accountants.

1.2 STATEMENT OF PROBLEM

One of the most fundamental problems currently militating against the success of businesses under the umbrella of partnership is simply the failure of leadership (Chukwuemeka, ( 2006). Ugwu (2009) argues that, many Partnership businesses are very often confrontational in the approach to issues which affect them as a group, such as the leadership and management, even partners not fulfilling some of the contracts between it and the workers.  In their most basic form, some partners enjoy a fixed share of the partnership (usually, but not always an equal share with the other partners). However, in more sophisticated partnerships, different models exist for determining either ownership or profit distribution (or both). The major problems of this of partnership form of business are that some partner feels like they carrying the bulk of the workload (or a partner is falling down on the job) and also when expectations are not being met it brings a huge challenges to the to the group and most especially when a partner has lost interest in the business or changed thinking.

1.3 OBJECTIVES OF THE STUDY

The main objective of the study is to examine the challenges of partnership in business.

The specific objectives are as follows:

1. To examine the feature of partnership form of business.
2. To find out the legal requirement for the formation of partnership form of business.
3. To examine the challenges of partnership in business.
4. To find out solutions to the challenges of partnership in business.

1.4 RESEARCH QUESTIONS

1. What are the features of partnership form of business?
2. What are the legal requirements for the formation of partnership form of business?
3. To what extent does the challenge of partnership effect its operation?
4. What are out solutions to the challenges of partnership in business?

1.5 SIGNIFICANCE OF THE STUDY

The value of any study lies in its usefulness to the society. In view of this fact therefore, this study which focuses on partnership in business, its challenges is of most useful to individuals and managers in various organization most importantly to departmental managers of the NDDC Port harcourt.

Apart from its value to decision makers in organizations, this study is of immeasurable importance to students and lecturers of the school of management sciences who may like to further their understanding of partnership min business.

Above all, it is therefore hoped that this study will stimulate further studies in this area.

1.6 SCOPE AND LIMITATIONS OF THE STUDY

The study is designed to cover Port Harcourt Metropolis Rivers State.

This study will be limited to the study of partnership in business and its challenges in NDDC Port Harcourt Rivers state.

The sample size involving One (1) Government organization (NDDC) and statistical error will also constitute the major weak point to the study; notwithstanding, the researcher believes that, the data generated will guarantee reasonable conclusion therein.

Limitation: The followings are limitations to the research work.

Finance: Accessing fund for the research work as difficult and this to a great extent limited the quality of research activity.

Time: The time allocated to the research work was not sufficient to give room for further intensive work on the field of study.

Organization Policy: Policies of some of the organizations visited limited the level of information received. The personnel of the firms were not willing to give information, stating that it was against the organization’s policy.

1.8 DEFINITION OF TERMS

Partners:  A person who takes part in an undertaking with another or others, especially in a business or company with shared risks and profits.

Partnership: The state of being a partner or partners.

Business: A person’s regular occupation, profession, or trade.