In a partnership with no manager, which group prevails on business decisions?

• A. The group with the majority prevails on business decisions.
• B. The group with the largest capital contribution prevails.
• C. Decisions require external arbitration.
• D. The partnership must appoint a manager.

Answer: (A)

When there is no manager, business decisions in a partnership are decided by the voting power of the partners, and the group with a majority wins. In such setups, each partner typically has an equal right to participate in management, and decisions are made by a simple majority of the votes cast. Capital contributions do not automatically govern decisions unless the partnership agreement specifies otherwise, so the largest contributor doesn’t automatically prevail. If votes are even, the partnership agreement usually provides a tie-breaking mechanism or a method to resolve deadlock. External arbitration isn’t the default path for ordinary decisions, and appointing a manager isn’t required since the premise is a managerless partnership.