The partnets in a partnership may be individuals, businesses, interest-based organizations, school, governments or combinations.
Pros and cons of a partnership
- You have an extra set of hands.
- You benefit from additional knowledge.
- You have less financial burden.
- There is less paperwork.
- There are fewer tax forms.
- You can’t make decisions on your own.
- You’ll have disagreements.
- You have to split profits.
Advantages of a partnership include that:
- Two heads (or more) are better than one.
- Your business is easy to establish and start-up costs are low.
- More capital is available for the business.
- You’ll have greater borrowing capacity.
- High-calibre employees can be made partners.
Purpose of Partnership
A partnership is an arrangement between two or more people to oversee business operations and share its profits and liabilities. In a genl partnership company, all members share both profits and liabilities. Professionals like doctors and lawyers often forn a limited liability partnership.
Liability for partnership debt
Partners are ‘jointly and severally liable’ for the firm’s debts. This means that the firm’s creditors can take action against more than one partner at the same time.