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If the deed says commercial decisions need a majority but structural decisions need unanimity, adding a new partner is what type of decision?

Answer and explanation

Correct answer: Structural decision

The governing concept is that admission of a partner changes the constitution of the partnership. A new partner does not merely participate in one sale or purchase; the admission affects the number of partners, future profit and loss sharing, capital contribution, management powers, agency relationships, and mutual obligations. It is therefore a structural or constitutive decision. Under the condition stated in the deed, such a decision requires unanimity, meaning every existing partner must consent. Cash sales and minor office expenses are routine commercial matters and do not change the legal or economic structure of the firm. Therefore option B, Structural decision, is correct.

Related tags

Partnership DeedAdmission Of PartnerStructural DecisionUnanimityPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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