Barry Dennis, the bookmaker decided that he had had enough of being a sole trader. He wanted to go into business with a partner who had some IT skills. This would help to help expand and develop his business. He already knew Chris Lincoln was looking for just such a business opportunity. Despite being a bit of a ‘dodgy’ character, Chris knew how to make money. He was young, enthusiastic and was a ‘computer geek’. He needed someone like Barry, who had experience to keep him in line. They decided to become partners. Look at the two scenarios below, that show what might have happened.

Scenario 1 / Scenario 2
The day of Barry Dennis’ retirement was a happy day for everyone. Barry sold his half share in Barry and Chris Bookmakers for £30 million. ‘Going into partnership with Chris was the best thing I ever did’ said Barry at his retirement speech. We worked well together, trusted each other, and brought different skills to our business. God bless him’ / Homeless bookmaker Barry Dennis vowed to get even with his former partner Chris Lincoln. Lincoln, who had limited liability, still lives a lavish lifestyle despite the failure of their partnership. He blamed Dennis for the bankruptcy of the bookmakers, saying that he was treated like a slave rather than a partner. Barry Dennis disagreed ‘I trusted Chris, and he betrayed me’.

1. The advantages of being a partnership

Using scenario 1, explain the following advantages of being a partnership. Give examples and explain your answers fully.

a. Barry and Chris both brought different skills to the business.

b. As partners, Barry and Chris would find it easier to raise money to invest in the business.

c. As partners they could help each other with decision making and give support when necessary.

d. As partners they could ensure the business had continuity and increase the amount of bets taken.

2. Scenario 2 could have been avoided if Barry and Chris had drawn up a deed of partnership. This legal document can help stop partners from falling out, by deciding on certain rules when the partnership is formed. Identify four areas that a Deed of Partnership should cover to prevent problems occurring.


3. A partnership can have between 2 and 20 partners. At least one partner must have unlimited liability. Why would this mean that Chris and Barry should both have agreed to have unlimited liability?