Since the amendment of the "new formulation' of the ordinance (in 1975), just four changes have been made, one of them technical and the other three revolving around one subject the number of partners allowed in a partnership.
Originally, the Ordinance restricted the number of partners to 10. In 1980, this restriction no longer seemed desirable in the eyes of the Israeli legislator, and the number was amended to 20. This amendment was also not enough and in 1998 the ordinance was again amended by in essence saying that excesses in the number of partnerships of lawyers and accountants in order to engage in their professions can and will be more than 20 members, but no more than 50 members, and the Minister of Justice, with the approval of the Knesset's Constitutional Law and Justice Committee is permitted to apply exceptions in other partnerships of certain professionals, so that they can practice their professions. The Minister is permitted to set the maximum number of members of such a partnership providing it does not go above 50.
Let us suppose for a moment that the true question was actually to distinguish between lawyers and accountants and to exclude them before others (apparently because their affairs did or did not bother somebody) because even these numbers were found to be insufficient. In 2010, the Ordinance was again amended and the number of overall partners was again set at 20 but for the exceptions (professional partnerships), the limit of 50 partners was removed.
Past experience shows that it is possible that even now the final word has not yet been said.
The question is often asked, what is the point to these repeated requirements on the subject, and if there is even any logic (at least in these times) of the actual restriction, especially when taking into account the weakness of all the aforementioned instructions for repeated amendments. One of the ways to cope with the restriction to the number of partners is to build a "partnership pyramid." Let's assume that 30 partners want to join together in a partnership for the purposes of a construction project. Such a large number, as explained, is larger than permitted. "The solution" to this difficulty can be found in setting up three partnerships (A, B, and C). Partnership A would be engaged in the project, and would have just two partners; Partnership B and Partnership C, the continuation of the pyramid, would each have the permitted number of 15 partners. Since according to the law, the partners are liable and entitled, both individually and jointly, even so their rights and liabilities are "bound together" through all the partners in the pyramid, when in fact the "real" partners are (those 30 original ones). In this way it is apparently possible to set up structures with "many floors" of partners (partnerships in which the partnerships are part of other partnerships, which in their turn are partnerships of partnerships, and so on and so on), and thus in practice it is possible to reach the desired number (up to no limit) of partners.
Due to the ease with which the law's instructions have "piled up," people ask about the original logic that set the ceiling for the number of partners. Sources indicate that probably: (a) the English law did not recognize partnerships as a legal entity, and consequently suits against partnerships were required to be filed against all the partners themselves, and if the partnership had a large number of partners then the need arose to conduct proceedings against many people a very problematic matter, and (b) the English ruling stressed relations of personal trust between partners and between themselves, and found it difficult to come to terms with the concept of "personal trust" between many dozens of partners.
These similar points are not valid today. Regarding the first point (the question of legal entities) for the most part Israeli law recognizes partnerships registered as independent legal entities (see clause 66 of the ordinance), and this is also probably the law in relation to the status of partners that are not registered. The second point too (the question of personal trust) does not seem to hold any weight. A situation of "personal trust" cannot be negated between individuals in a large group (and even very large) of people, and in every place the Partnership Ordinance does not talk in the language of "personal trust" but rather that the partners are required, "to be honest and faithful to others…" (clause 29 of the Ordinance). Although it is clear that the obligation to behave with integrity and trust can indeed include a large group of individuals. By the way there is nothing to prevent all the partners from being corporations (and not flesh and blood people) and obviously the "recoiling" of the old English law from broad dimensions of "personal trust" loses its valuable weight when the partners themselves are not flesh and blood.
In short, considering the logic and the message of the point of determining the aforementioned, it no longer seems effective but from here on and considering that changing the number of partners permitted requires the Israeli legislator to get involved time and again in the matter it would be worthwhile adopting the solution of Alexander of Macedonia regarding the "Gordian knot" (then according to the story with a simple swish of his sword, he cut the knot that so many before him had tried to unravel unsuccessfully with their hands), and thus cancelling the entire Ordinance, clauses 3 and 3A together. Following the cancellation it would be possible to put together partnerships with an unrestricted number of partners (including general partners), and there would no longer be a need to distinguish (in effect) regarding professional associations that do not belong to lawyers and accountants.
This list should be examined as an additional incentive by the legislating system in the Ministry of Justice which is engaged, as far as is known, in renewing the entire Ordinance.
