1. First the law prohibits the creation of a partnership consisting of more than 20 persons. Refer to the case of Fort Hall Bakery Supply Co. V. Wangoe  EA 474 this was an organisation of more than 40 people. The manager thereof misappropriated some money and an action was filed against him. It was not registered either under the Companies Act or the Registration of Business Names Act. The court held that it could not take cognizance of it except for penal matters.
- A partnership may be illegal if it is formed for a purpose forbidden by law or which is contrary to good morality or against public policy. the court will not enforce the rights of the parties against each other. Note that purposes which are legal at the inception of the partnership may subsequently become illegal for example by the passing of an Act of Parliament. In such cases the partnership is automatically dissolved upon the passing of such an Act.