Government abolishes limit on partnerships

Partnerships will now be allowed to expand and develop their membership as they like, thanks to a Regulatory Reform Order removing the 20 member limit.

The order invalidates Section 716(1) of the Companies Act 1985, which prohibited the formation of partnerships with more than 20 members.

Announcing the move, Melanie Johnson, DTI minister for competition, consumers and markets, said: "Regulations limiting the number of members in a partnership are now outdated and unnecessary. They have long been viewed as creating red tape and imposing an artificial check on growth."

The proposal to abilish the limit on the number of partners allowed in a partnership was first announced in November 2000.